Analysts predict gold prices to reach $3,000 by next year, with the Fed rate decision on the horizon.

• As the next U.S. Federal Reserve meeting approaches, analysts predict that gold prices will hit even more highs this year.
• Sabrin Chowdhury, head of commodities analysis at BMI, stated that "Gold thrives from uncertainty, which is currently at its peak."

As the U.S. Federal Reserve meeting approaches, analysts predict that gold prices will continue to break records, with some forecasting the metal to reach $3,000 per ounce next year.

During Monday Asia hours, U.S. gold futures jumped 0.16% to set a new record of $2,540.8 per ounce, while the price of gold held steady at last session's record high of $2,508.14 per ounce, according to data from FactSet.

According to Sabrin Chowdhury, head of commodities analysis at BMI, gold is predicted to reach multiple highs in 2024 due to its status as a safe haven asset.

"Gold thrives from uncertainty, which is at its peak in 2024 with elections, Ukraine's recent incursion into Russia, and growing Middle East tensions," she stated.

A direct conflict between Israel and Iran seems imminent after Iran's promise to retaliate following the assassination of Hamas political leader Ismail Haniyeh in Tehran. Israel has put its military on high alert, and the U.S. has sent a carrier strike group and guided-missile submarine to the region to support its ally's defense.

The possibility of a Fed rate cut in September is increasing the demand for bullion, with some analysts predicting that gold could reach $2,700 an ounce.

Lowering interest rates increases the attractiveness of buying gold as a safe-haven investment, compared to interest-bearing assets like Treasurys.

The lowering of interest rates causes the dollar to lose value, making gold a more attractive investment option for those holding other currencies.

Citi analysts predict that gold investor sentiment will be positive in the next three to six months, according to a note released on Monday.

The bank predicts a $3,000 per ounce target by the middle of 2025 and a fourth quarter average price forecast of $2,550 per ounce.

The annual economic policy symposium in Jackson Hole this week will provide traders with greater clarity on the interest rate outlook, as Fed Chair Jerome Powell is scheduled to speak at the gathering.