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Gold has outperformed the broader U.S. stock market this year, and Wall Street is turning more bullish on the precious metal as the Federal Reserve gets closer to rate cuts.<\/p>\n
Bullion has jumped about 21% in 2024, while the S&P 500 has climbed 16%. On Friday, gold shot up as much as 2.2% to a fresh record high, exceeding $2,500 per ounce<\/a>. <\/p>\n While recession fears eased<\/a> over the past week after a weak payroll report<\/a> set off alarms, recent indicators have pointed to softness in key areas like homebuilding that may justify more aggressive Fed rate cuts.<\/p>\n Gold typically rallies when assets that pay a yield, like bonds, become less attractive as the outlook dims on long-term rates.<\/p>\n In a note on Friday, Commerzbank<\/a> Research raised its forecast on gold, predicting three Fed rate cuts by the end of this year and three more in the first half of 2025. Overall, that\u2019s two more cuts than previously anticipated.<\/p>\n \u201cAccordingly, we expect the gold price to rise further to $2,600 by the middle of next year,\u201d senior commodity analyst Carsten Fritsch wrote. \u201cAt the end of 2025, the gold price is likely to fall to $2,550 (previously $2,200) in view of the renewed rise in inflation and the associated speculation of interest rate hikes in the following year.\u201d<\/p>\n Other analysts are even more bullish.\u00a0Bart Melek, global head of commodity strategy at TD Securities, told Bloomberg<\/a> on Friday that gold could hit $2,700 per ounce in the coming quarters, citing prospects for Fed easing.<\/p>\n Meanwhile, Patrick Yip, senior director of business development at American Precious Metals Exchange, told CBS Money Watch<\/a> late last month that gold could reach $3,000 as soon as next year, if there\u2019s\u00a0continued geopolitical uncertainty, rate cuts, or more buying from global central banks.<\/p>\n In fact, central banks have been a top source of gold demand as countries like China, Turkey and India look to diversify their reserves away from the U.S. dollar, especially since witnessing the West freeze Russia\u2019s dollar assets in the wake of its Ukraine invasion. <\/p>\n According to JPMorgan\u2019s estimates, central banks purchased over 1,000 metric tons of gold last year<\/a>. The People\u2019s Bank of China<\/a> went on an 18-month buying spree, its longest-ever run of purchases, that finally ended in May. And in June, India\u2019s central bank boosted its gold reserves<\/a> by the most in almost two years.<\/p>\n Meanwhile, fears continue to linger about a possible recession, which would drive demand for safe-haven assets like gold and force the Fed to make deeper rate cuts.<\/p>\n \u201cBlack Swan\u201d investor Mark Spitznagel, founder and CIO of the private hedge fund Universa Investments,\u00a0told Fortune<\/em> that a recession is coming this year<\/a> as the biggest market bubble in history will soon pop.<\/p>\n \u201cIt\u2019s not different this time, and anybody who says it is really isn\u2019t paying attention,\u201d he said,\u00a0adding \u201cthe only difference is the magnitude of this bubble that\u2019s popping is bigger than we\u2019ve ever seen.\u201d<\/p>\n<\/div>\nRecommended Newsletter: <\/strong>CEO Daily provides key context for the news leaders need to know from across the world of business. Every weekday morning, more than 125,000 readers trust CEO Daily for insights about\u2013and from inside\u2013the C-suite. Subscribe Now<\/a>.<\/div>\n