Eric Sepanek
SBC Founder
Eric Sepanek is the founder of Scottsdale Bullion & Coin, established in 2011. With extensive experience in the precious metals industry, he is dedicated to educating Americans on the wealth preservation power of gold and silver.
The combination of physical gold demand along with Fed easing has UBS Precious Metals Strategist, Joni Teves foreseeing a gold price target of $3,000. The Swiss bank did revise its gold forecast earlier in 2024, joining a host of financial institutions and economists who have upped their gold price predictions for 2025. Joni Teves at UBS points to the dollar’s diminishing appeal as the one of the factors driving safe-haven demand.
UBS’ Bold Predictions
In a CNBC interview, UBS announced its anticipation for gold to hit $2,800 by the end of 2024 and sees the performance getting even brighter in 2025 with a price target of $3,000.
It’s worth noting that these elevated benchmarks come on the back of an already record-setting gold rally. Gold prices have posted a staggering 36% rally from peak to trough and nearly 30% from YTD, underscoring gold’s resiliency.
Rate Cuts Prompt Gold Rush
The Federal Reserve’s half-point and quarter-point rate cuts is seen as an inflection point in the economic trajectory. Analysts explain how this aggressive and immediate fiscal policy shift will prompt a transition from dollar-tied investments such as stocks to safe-haven assets such as gold. “Now that the Fed’s easing cycle is underway, we expect investors to start increasing gold positions as the cost of carry continues to decline.” In other words, it’s becoming increasingly risky to park wealth in the dollar or associated instruments, causing a modern-day gold rush. This is already playing out as gold ETFs see their fifth consecutive month of inflows with North American investors leading the charge.
Central Bank Binging Continues
While retail investors are ramping up their buying, central banks have been charting record gold demand over the past few years. Collectively, nations topped up their reserves at peak levels in 2022, 2023, and the first half of 2024. UBS analysts highlight China and other emerging economies as the strongest drivers of sustained gold demand moving forward, although it expects central banks and financial institutions across the board to keep their foot on the gold-buying pedal. Eric Sepanek, the founder of Scottsdale Bullion & Coin, encourages investors to follow in the footsteps of the world’s wealthiest and most well-informed investors. “The bigger central banks…and nations…are buying a ton of gold. Take a page out of their book.”
Dollar Shows Weakness
Another boon to gold’s anticipated rise is the dollar’s relative weakness. The greenback is being crushed under a growing mountain of national debt and irresponsible fiscal policies. This domestic vulnerability is compounded by a worldwide de-dollarization movement as nations seek to distance their economies from the dollar’s influence. Investment analysts explain that gold strength is typically a corollary to a dollar downturn. “A bearish US dollar trend also acts as a tailwind for gold, especially as the yellow metal provides an alternative to other currency crosses.” The weaker and more volatile the dollar becomes, the more both retail investors and central banks will flock to gold to safeguard their investments.