UOB: Gold prices could rise to $3,000/ounce by end-2025

ANTD.VN - According to UOB experts, slowing growth and geopolitical risks will put pressure on commodity prices, but gold will continue to benefit from safe-haven demand.

Crude oil and copper are set for another tough year.

Mr. Heng Koon How, Head of Market Strategy, Global Economics and Market Research, UOB Singapore, 2024 is a difficult and challenging year for the world's major commodities.

Brent crude peaked at around $90 a barrel in the second quarter and has since fallen to around $75. Copper — another gauge of global economic health — peaked at just under $11,000 a tonne in the second quarter and fell to $9,000 a tonne in December.

The expert said that the volatility in Brent crude oil prices and copper prices are both signs of the increasingly challenging global economic landscape.

Gold is expected to continue to benefit as geopolitical uncertainty increases

For Brent crude, the historical correlation between major energy producers has now reversed. The Organization of the Petroleum Exporting Countries (OPEC) is finding it increasingly difficult to stabilize crude prices and maintain market share, as it increasingly cedes market share and pricing power to the United States.

With an output of about 13.5 million barrels per day, the United States is now the world's largest crude oil producer, producing about 50% more per day than Saudi Arabia.

With growth slowing from both China and the Eurozone, the outlook for global energy demand has been continuously downgraded by OPEC. As a result, the threat of oversupply has sent Brent crude prices falling further.

UOB experts do not rule out the risk of Brent crude falling below US$70 if the second Trump administration significantly increases tariffs on China and the world in 2025.

As for copper prices, a commodity that is seen as a proxy for economic health, currently struggling just below $9,000 a tonne by the end of 2024, it is signaling that the health of the global economy will weaken further by 2025.

Copper prices, in particular, have reacted strongly to concerns about China’s economic slowdown. With Chinese industrial activity yet to pick up significantly, copper stocks on major exchanges around the world have increased. Immediate demand for the commodity has also shown signs of weakening.

“Therefore, we have a negative outlook on copper and see copper prices sliding to $7,500/t by end-2025,” UOB experts forecast.

However, the expert said the medium- to long-term prospects for these two commodities could be completely different. For Brent crude, any escalation in the Middle East could reduce crude supply and push prices higher.

For copper, the risk of a supply shortage is growing. Lower supply from older copper mines will not keep up with rising demand from the green transition and growing global adoption of electric vehicles.

Gold continues to rise in price thanks to safe-haven demand

Gold has had a very strong year in 2024, rising by about a third from $2,000 an ounce in January to its current level of around $2,600.

According to UOB experts, on a long-term perspective, positive drivers remain intact – including continued gold allocations by emerging markets and Asian central banks, as well as strong physical gold and jewellery demand from the retail sector.

There is a common thread running through the surge in demand from central banks and the retail sector, both driven by a need to diversify away from growing geopolitical concerns and uncertainty surrounding the US dollar, in the face of disruptive trade and fiscal policies from a second Trump term.

“We maintain our positive view on gold as long-term safe-haven demand is likely to remain strong amid continued geopolitical and economic risks from Trump 2.0.

We forecast gold to rise further to $3,000/ounce by the end of 2025. The immediate strength of the US dollar could lead to a short-term consolidation trend for gold before continuing its upward momentum in 2025,” said Heng Koon How.

Source: https://www.anninhthudo.vn/uob-gia-vang-co-the-tang-len-3000-usdounce-vao-cuoi-nam-2025-post599856.antd