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HSBC increases average gold price forecasts 2025 and 26

HSBC increases average gold price forecasts 2025 and 26

HSBC raised its forecast for the average price of gold in 2025 to $3,355 from $3,215 because of safe-haven demand fueled by geopolitical tensions and economic uncertainty.

In a note from October 15, the bank stated that "sentiment is bullish" as it expects rallies to continue into 2026, aided both by buying from the official sector and demand for gold among institutions as a diversifier.

HSBC has also increased its forecast for the average 2026 gold price to $3.950 from $3.125.

GOLD HITS A NEW RECORD HIGH

HSBC reported that the demand for gold is increasing due to mounting fiscal deficits across major economies, including the U.S.

Gold has been traditionally viewed as a safe haven during economic and geopolitical instabilities. Its value has increased by over 60% this year and reached a new record of $4,250.89.

China accused the U.S. on Thursday of inciting panic over Beijing's controls on rare earths and said Treasury Sec. Scott Bessent made "grossly distortion" remarks about an important Chinese trade negotiator. The Chinese rejected a U.S. request to roll back curbs.

HSBC stated that "central bank demand will likely remain high due to geopolitical risk and dollar diversification but lower than peak levels in 2022-23".

HSBC stated that a lower rate cut than the Federal Reserve's current projections for this year or next could dampen the rally.

Investors have priced in a rate cut of 25 basis points at the Fed meeting this month, and expect another in December.

HSBC stated that the gradual decline in global inflation could also dampen jewelry purchases, which are driven by inflationary fears.

The bank also maintained its average 2025 price forecasts of palladium and platinum at $1,100 and $1,215, respectively. Reporting by Noel John, Bengaluru. Editing by Mark Potter

(source: Reuters)