Goldman Sachs expects the price of an ounce of gold to reach $3,000 by this date.

The American investment giant Goldman Sachs published a memo released late last week, outlining its expectations for gold price movements in the coming period. Goldman Sachs analysts expect the price of the yellow metal to rise and reach $3,000 per ounce by the end of 2025.

Goldman Sachs believes that as an asset that does not provide any yield, gold typically becomes less attractive to investors when interest rates are higher, and usually more attractive when interest rates are lower. Experts from the bank argue that this will fundamentally support gold.

Goldman Sachs also cited reasons supporting the rise in gold prices, including forecasts indicating a decrease in interest rates along with increased purchases of bullion by central banks, as well as significant demand for gold from exchange-traded funds (ETFs).

Regarding central bank purchases of gold, Goldman Sachs clarified that central bank purchases of gold have significantly rearranged the relationship between interest rates and price levels since 2022. Goldman Sachs estimates that 100 tons of physical demand raises gold prices by at least 2.4%.

The American lender highlighted that the freezing of Russian central bank assets in 2022 following the start of the Russian-Ukrainian war has pushed central banks in emerging markets to increase their gold purchases.

Goldman Sachs pointed out that central banks in advanced markets tend to hold relatively high shares of gold. For example, reports indicate that China has 5% of its reserves in gold. In this way, some central banks in emerging markets are catching up with their counterparts in developed countries.

On the other hand, Goldman Sachs sees that strikes and storms have placed significant pressure on the October employment report. It explained that the data was an argument to continue the U.S. Federal Reserve's easing cycle, and the bank expects a 25 basis point cut in this week's meeting on November 6 and 7.