GOLD is forecast to trade at $3,500 per ounce in the next two years and will achieve higher average prices this year, according to price revision by Bank of America.The bank said gold would average at $3,063/oz and $3,350/oz in nominal terms in 2025 and 2026 respectively, from $2,750/oz and $2,625/oz previously.Its forecast was based on gold investment increasing 10% largely driven by China. Continued central bank purchases and retail sector interest would also support the metal’s demand.Central banks currently hold about 10% of their reserves in gold, and could raise this figure to more than 30% to make their portfolios more efficient, said Bank of America. “Uncertainty around Trump administration trade policies could continue to push the US
dollar lower, further supporting gold prices near-term,” it added.It joins a number of other institutions expecting sustained high prices for the metal.According to Deutsche Bank in a report last week Chinese insurance companies could add $120 per ounce to the gold price. This is in terms of a pilot program outlining the structure for some of China’s largest insurance companies to invest in gold.In joining the exchange, four entities – accounting for 74% of the 2023 year-end investment assets – were leading up to $25bn in investment from China’s insurance sector, enough to continue driving the metal’s price. As they had just joined the Shanghai Gold Exchange it was arguable whether this demand was yet in the price.They are PICC Property and Casualty Company Limited, China Life Insurance Company Limited, Ping An Life Insurance Company of China Limited and China Pacific Life Insurance Company Limited. Were they to invest 1% of their assets in gold, it would equal about 6% of the annual gold market.Retail investors have also been increasing their exposure to the yellow metal, with assets under management at physically backed ETFs increasing by 4% YoY YTD in the Americas, Europe and Asia.Fund flow data for the three largest Chinese Physical gold ETFs have shown $159m of inflows in the last three days, said BMO Capital Markets. Overall EFT inflows of 259 tons are approaching levels last seen during the Russian invasion of Ukraine in 2022.Gold was last trading at $3,117.80 per ounce and at R1,843m per kilogram, taking shares Harmony Gold and Pan African Resources to fresh all-time highs. Harmony is worth R167.4bn, representing a gain of 64% over the last 12 months. DRDGold hit a 23 year high while Pan African Resources reached record value of £864.96m (R206bn).The post Bank revises average gold price as metal surges on and on appeared first on Miningmx.
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