(Reuters) - Major banks expect gold to extend its record-breaking price rally into 2025 because of a revival in large inflows to exchange-traded funds (ETFs) and expectations of additional interest rate cuts from prominent central banks around the world, including the U.S. Federal Reserve.

"Gold is expected to remain strong, as the US economy is clearly late cycle - with further labor market deterioration anticipated... and numerous central banks remain keen buyers. Gold should also benefit in the scenario that oil spikes on near-term Middle East escalation," Citi said in a note.

"We reiterate our long gold recommendation due to the gradual boost from lower global interest rates, structurally higher central bank demand and gold's hedging benefits against geopolitical, financial, and recessionary risks," Goldman Sachs said in a note on Sep. 30.

Moderating but still significant central bank purchases on the London OTC market could drive about two-thirds of the expected rise of the gold price to $2,900 per ounce in early 2025. Meanwhile, the gradual rise in exchange-traded fund flows following the Fed rate cuts are expected to drive the remaining one-third of price upside, analysts at Goldman Scahs said.

Non-yielding gold has gained nearly $652 an ounce, or 31.6%, so far this year, putting it on track for its biggest annual rise since 2007 and positioning itself as one of the standout assets of 2024. The precious metal hit a record high of $2,740.37/oz on Monday and has notched record highs several times this year. [GOL/]

"Strong physical demand from China and central banks supported gold prices over the past two years, but investor flow, and retail-focused ETF builds in particular, continue to hold the key to a further sustained rally over the upcoming Fed cutting cycle," analysts at J.P. Morgan said in a note on Sep. 23.

The Fed began its easing cycle on Sep. 18 with a half-percentage-point rate cut, and forecast another 50 basis points of cuts by the end of this year and a full percentage point of cuts next year.

Zero-yielding bullion tends to be a preferred investment in a low-interest rate environment and during geopolitical turmoil.

The Nov. 5 U.S. presidential election could also boost gold prices further as potential market volatility may drive investors towards safe-haven gold, analysts said. 

The following is a list of the latest brokerage forecasts for 2024 and 2025 prices for gold (in $ per ounce):

Brokerage/Agen Annual Price Price Targets 

cy Forecasts

  2024 2025  

Commerzbank* $2,600 $2,600 $2,600 for mid-2025

ANZ* $2,394 $2,805 $2,900 by end-2025

Macquarie $2,339 $2,463 Q1, 2025 peak of

$2,600/oz, with

potential for a spike

towards $3,000/oz

Goldman Sachs  $2,395 $2,973 $2,900 by early-2025

UBS - - $2,700 by mid-2025

BofA $2,365 $2,750 Scope for gold to hit

$3,000/oz

J.P. Morgan $2,398 $2,775 $2,850 

Citi Research $2,400 $2,900 0-3 month forecast at

$2,800/oz and 6-12

month forecast is

$3,000/oz

*end-of-period forecasts