Gold prices could notch an all-time high soon

Smallwood forecasts gold prices hitting $2,500.

Demand for gold skyrocketed to an 11-year high in 2022, owing to “colossal central bank purchases,” according to the World Gold Council. Central banks bought a 55-year high of 1,136 tons of gold last year.

In late March, Fitch Solutions predicted that gold would notch a high of $2,075 “in the coming weeks.” The firm based that outlook on “global financial instability,” adding that it expects gold to “remain elevated in the coming years compared to pre-Covid levels.”

Craig Erlam, a senior market analyst at foreign exchange company Oanda, agrees with Fitch’s buoyant outlook.

“I think it’s very plausible that we see a strong performance in gold over the coming months. The stars appear to be aligning for gold which could see it break new highs before long,” he said.

“Interest rates are at or near their peak, cuts are now being priced in sooner than anticipated on the back of recent developments in the banking sector,” said Erlam, who added that he thinks that dynamic will boost gold demand, even if it coincides with a softer dollar.

Investors are closely watching the Federal Reserve’s next moves and their impact on gold prices.

The Fed began their two-day meeting on Tuesday, where it’s widely expected to approve a 25 basis point rate hike Wednesday, though predictions vary among analysts.