Major banks expect gold to extend its record-breaking price rally into 2025 because of a revival in large inflows to exchange-traded funds (ETFs) and expectations of additional interest rate cuts from prominent central banks around the world, including the U.S. Federal Reserve.

“Strong physical demand from China and central banks supported gold prices over the past two years, but investor flow, and retail-focused ETF builds in particular, continue to hold the key to a further sustained rally over the upcoming Fed cutting cycle,” analysts at J.P. Morgan said in a note on Monday.

Non-yielding gold has gained nearly $570 an ounce, or over 27%, so far this year, putting it on track for its biggest annual rise since 2010 and positioning itself as one of the standout assets of 2024. The precious metal hit a record high of $2,639.95/oz earlier on Tuesday and has notched record highs several times this year.

“Despite reaching multiple highs this year and outperforming major stock indices, we believe gold has more room to run over the next six to 12 months,” analysts at UBS said in a note last month, adding that “key factors in our view include a revival of large inflows to exchange traded funds (ETFs) – something that has been missing since April 2022.”

The Fed began its easing cycle last week with a half-percentage-point rate cut, and forecast another 50 basis points of cuts by the end of this year and a full percentage point of cuts next year.

Zero-yielding bullion tends to be a preferred investment in a low interest rate environment and during geopolitical turmoil.

The Nov. 5 U.S. presidential election could also boost gold prices further as potential market volatility may drive investors towards safe-haven gold, analysts said.

The following is a list of the latest brokerage forecasts for 2024 and 2025 prices for gold (in $ per ounce):

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