Market Data 
Investing.com — Bernstein analysts said in a note this week that gold could potentially reach $3,400 per ounce if U.S. real interest rates drop to zero, driven by fiscal policies that could weaken the U.S. dollar.
“Gold has an established negative relationship with [the] U.S. dollar and real rates,” Bernstein notes, as gold typically gains value when fiat currency, such as the dollar, loses strength.
The path to $3,400 per ounce would likely involve a “red sweep or a blue sweep,” which Bernstein views as increasing U.S. fiscal deficits and debt, putting downward pressure on real rates.
In the near term, Bernstein sets a more conservative gold price forecast, estimating an average price of $2,600 per ounce for Q4 2024 and $2,500 per ounce for 2025-2028, which is 5-10% above market consensus.
Additional demand from central banks, particularly in countries like China, Russia, and Singapore, which have tripled their gold reserves over the past decade, also supports a bullish outlook for gold, according to the firm.
Geopolitical tensions, including recent conflicts, have also increased demand for gold as a “flight-to-safety” asset. While easing geopolitical risks could soften gold prices, Bernstein anticipates that lower prices would spur further buying from central banks, creating a stabilizing force for the metal.
Bernstein also highlights the role of exchange-traded funds (ETFs) in gold’s price momentum.
“We have seen small inflows to gold ETFs” recently, which, if sustained, could further elevate gold prices,” says Bernstein.
In this environment, the firm believes gold equities, particularly Barrick, could offer attractive leveraged exposure.
Focusing on Barrick, Bernstein states: “As Barrick is growing production, we expect cost pressure to dissipate and margin to return higher, which could be a recipe for multiple re-rating.”
