Gold has outshone Indian equity markets in the past 6 months. While the NSE Nifty has risen close to 14% in the last 6 months, the yellow metal has surged by 18%.
Factors Driving Gold’s Surge
Gold prices surged to an all-time high in mid-May driven by robust safe haven and hedge fund purchases. This rally has been prompted by expectations of rate cuts from the Federal Reserve and other central banks, as well as increasing economic uncertainty. Furthermore, rising fiscal deficits have spurred significant gold purchases.
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Is Gold Still a Good Investment?
So, even after this rally, does gold still remain a good investment? Analysts at HSBC expect real rates to weigh on gold towards the end of 2024 and 2025.
HSBC’s Price Forecasts for Gold
Within this context, HSBC has raised its average price forecast for gold due to the near-term strength.
However, the bank expects a potential decline in prices by Q4 this year or into 2025.
Analysts’ Price Projections
Specifically speaking, analysts have lifted their average gold price forecast for 2024 from $2,160 per ounce to $2,350 per ounce.
Yet, their 2025 best estimates are now lowered from $2,150 per ounce to $1,980 per ounce, implying a 12% drop from current levels.
Analysts expect gold prices to rebound in 2026, raising their average price projection for that year from $1,880 per ounce to $2,250 per ounce.
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