Dr. Mohamed Abdel Wahab, an economic analyst and financial advisor, has projected a significant rise in gold prices over the next two years. He attributes this growth to a combination of economic and geopolitical factors that are boosting global demand for gold as a safe-haven asset.
Factors Influencing Gold Prices
Abdel Wahab stated that the current price of gold stands at approximately $2,614 per ounce. He expects a notable increase of 35% during the first year, pushing prices to around $3,580 per ounce by the end of 2025. In the second year, the upward trend is anticipated to continue with a 28% increase, reaching approximately $4,500 per ounce by the end of 2026.
He highlighted several key drivers supporting this upward trend, including:
Gradual Interest Rate Cuts by the Federal Reserve:
“Monetary easing encourages investors to seek safe-haven assets like gold, as lower interest rates reduce the appeal of fixed-income investments compared to gold,” Abdel Wahab explained.
Geopolitical Tensions:
“Ongoing geopolitical events amplify the demand for gold as a hedge, especially in times of economic uncertainty,” he noted.
Increased Gold Reserves by Central Banks:
“Central banks are actively increasing their gold reserves, which further bolsters prices,” he added.
Potential Challenges That Could Weigh on Prices
Despite the optimistic outlook, Abdel Wahab pointed out certain factors that could limit gold’s upward trajectory, such as:
Conservative Policies by the Federal Reserve:
“The anticipated rate cuts in 2025 might be less than expected, which could dampen support for gold prices,” he remarked.
Strength of the US Dollar:
“A stronger dollar, particularly if Donald Trump returns to office, could make gold more expensive for international buyers, reducing demand,” he added.
Global Outlook on Gold Prices
Regarding global forecasts, Abdel Wahab referred to a report by Goldman Sachs predicting that gold could reach $2,900 per ounce by the end of 2024. However, he emphasized the cautious sentiment among analysts due to the interplay of various influencing factors.
Current Market Performance
Commenting on recent market trends, Abdel Wahab noted that gold experienced a slight decline of 1% last week, hitting its lowest level in a month at $2,583 per ounce, after opening the week at $2,648 per ounce and closing at $2,623 per ounce. He attributed this dip to the subdued trading volumes typical of December, compounded by year-end holidays and low investor activity.
Future Outlook
In conclusion, Abdel Wahab reiterated that gold remains a critical investment tool under the current economic conditions. He forecasted a gradual rise in prices over the next two years, potentially reaching unprecedented levels by the end of 2026, barring significant global interventions or new conflicts that might accelerate the pace of gold’s global ascent.
