Although gold prices are still significantly lower than the historical peak last month, Ms. Ewa Manthey - commodity strategist at ING - said in the latest monthly report that she still maintains a positive view on this precious metal.
According to her, the average gold price in the fourth quarter of this year could reach about 4,000 USD/ounce and will increase to 4,100 USD/ounce in the first quarter of 2026.
Ms. Manthey commented: Even after the recent weakness, gold prices have increased by more than 50% compared to the beginning of the year. Key supporting factors such as central bank demand and safe-haven demand remain. ETF buying will also recover as the US Federal Reserve (FED) is likely to continue cutting interest rates.
We consider the current correction to be healthy, not a sign of reversal. Any further price reduction could attract both individual and institutional investors back."
Gold prices are lacking new upward momentum after Fed Chairman Jerome Powell said it is unlikely to cut interest rates in December. However, analysts believe that the weakness of the US labor market will force the FED to lower interest rates this year and continue into the first half of next year.
Despite Powell's cautious tone, the CME FedWatch tool shows that the market still predicts a 71%, chance of the Fed cutting interest rates next month.
Ms. Manthey noted that investment demand was a key factor in gold's record rally in the third quarter. Expectations of a Fed easing policy soon have prompted investors to pour money into gold ETFs at the fastest pace in years. According to data from the World Gold Council (WGC), global gold ETFs increased by 222 tons in the period from July to September.
Although there has been a phenomenon of capital withdrawal recently, we expect net buying activities to return soon when the FED continues to cut interest rates. The current futures market still shows a more than 70% chance of a rate cut in December," she added.
In addition, global demand for gold bars and gold bars remained steady in the third quarter.
Not only thanks to investors, gold prices are also supported by strong buying activities of central banks.
Central banks remain the main pillar of gold demand. In the third quarter, they accelerated their purchases after two consecutive quarters of slowing down. Total purchases are estimated at 220 tons, up 28% over the second quarter and 6% higher than the 5-year average.
Many central banks have shown no signs of stopping: The South Korean Central Bank is considering adding gold to its reserves for the first time since 2013, while the Serbian president said the country will nearly double its gold reserves to 100 tons by 2030.
We believe that the buying trend of gold by central banks is long-term structural. As foreign exchange reserve strategies change, they will continue to increase their gold holdings in reserves,manthey said.
