Easing gold prices a welcome trend for consumers

Prospective jewellery and bullion buyers have reason to celebrate as the recent record rally in gold prices shows signs of cooling. Analysts are now revising their bullish gold price projections, pushing the anticipated $3,000 per ounce target from the end of 2025 to mid2026.

- Issac John

Experts attribute this shift to a slower-than-expected pace of monetary policy easing by the US Federal Reserve this year. Consequently, the year-end price target for gold has been adjusted to $2,910 per ounce, with only one or two rate cuts anticipated this year, down from earlier expectations of three to four.

Additionally, a significant discovery of 11,000 tonnes of gold valued at $83 billion in China’s Hunan province has added headwinds to the ongoing rally. This finding marks one of the largest gold discoveries in history. While China is already the largest gold producer, contributing 10 per cent of the global supply, its consumption surpasses production. Analysts suggest that while this discovery may reduce China’s reliance on imports from countries like Australia and South Africa, it is unlikely to dramatically shift the global supply-demand balance overnight.

Gold prices have surged more than 30 per cent in 2024 compared to the previous year, reaching a historic high of $2,748.23 per ounce in October. However, as of Tuesday afternoon, the price had eased to $2,664.40 per ounce. In Dubai’s Gold Souk, the price of popular 22k jewellery stands at Dh296.75, a notable increase from Dh227.25 a year ago.