Major bank forecast

The gold price could reach this horrendous level

The price of gold will continue to rise, experts say.(Bild: Peter Tomschi)

For the fifth day in a row, the price of gold has risen to a new record high. The price of silver is also higher than ever before. And the soaring price of precious metals is far from over, as the major British bank HSBC predicts. 

According to HSBC, the mark of 5000 dollars (around 4300 euros) per troy ounce could be broken for the first time next year. The reasons cited on Friday were geopolitical tensions, uncertainty over economic policy, rising national debt and a weaker US dollar.

The price continued to rise on Friday. The price of a troy ounce (approx. 31.1 grams) rose by up to 1.2 percent to almost 4,380 US dollars in early trading. In dollar terms, the precious metal thus reached a record high for the fifth day in a row.

Investors hold on to their gold
HSBC assumes that many of the new buyers on the gold market are likely to remain invested even after the rally subsides. They are not only looking for price gains, but are also using gold for diversification and as a safe haven. A series of interest rate cuts by the US Federal Reserve is also likely to support the gold price. However, its effect will diminish with the end of the cycle, the analysis continued.

Other analysts also see a rise
Other analysts are also optimistic. The bank ANZ forecasts a high of just under 4,600 dollars per troy ounce by June 2026, after which the price will gradually fall as the Fed ends its easing cycle and there is more clarity about US economic growth and customs policy.

  According to DekaBank, a self-fuelling trend could also drive the gold price. "After a number of central banks have set the price in motion in recent years through purchases, more and more investors are now jumping on board in the hope of an even higher gold price," said DekaBank chief economist Ulrich Kater. "However, if these risks do not translate into crises, significant corrections are also likely."

Low interest rates usually weaken the dollar
If US key interest rates are high, investments such as US government bonds offer an attractive alternative to gold, which does not yield any interest. However, if the key interest rate falls, the yield advantage of government bonds and similar forms of investment shrinks. This makes gold more attractive for investors. What's more: Lower interest rates usually weaken the dollar. As gold is traded on the global market in the US currency, it becomes more attractive for buyers outside the United States in terms of price. This boosts demand, which in turn could also drive up the price.

In September, the US Federal Reserve lowered its key interest rate by 0.25 percentage points to a range of 4.00 to 4.25 percent. Many experts assume that it will lower it again by a quarter of a percentage point in the coming week.