Market Veteran Predicts Potential 50% Upside for Gold Prices by 2025 Amid Inflation Concerns
Renowned market expert Ed Yardeni has forecasted a significant surge in gold prices, projecting a potential rise to $3,500 per ounce by the conclusion of next year. Yardeni’s prediction implies a substantial uptick of nearly 50% for the precious metal, contingent upon the resurgence of inflation hitting a second peak.
Yardeni, serving as president of Yardeni Research, has drawn parallels between current economic indicators and the inflationary trends witnessed during the 1970s. During that era, as inflation began its ascent, gold prices skyrocketed from a modest $35 per ounce to an unprecedented peak of $665 per ounce.
In his analysis shared with clients on Sunday, Yardeni highlighted the recent record-setting performance of gold prices, notably reaching all-time highs in March. He emphasized the potential for history to repeat itself, particularly if a wage-price spiral fueled by escalating oil prices mirrors the conditions of the Great Inflation era. In such a scenario, Yardeni suggests that a price range of $3,000 to $3,500 per ounce becomes a realistic target for gold through the duration of 2025.
While recent consumer price data has shown a notable decline from its peak above 9% in 2022, concerns persist among market observers regarding the possibility of inflation resurging. Factors contributing to these concerns include ongoing supply-chain disruptions triggered by geopolitical tensions and the robust US labor market. Additionally, the surge in crude oil prices, with Brent crude surpassing $90 a barrel last week amid continued output cuts by OPEC+ producers, has added to inflationary pressures.
Yardeni has also warned of the potential for further escalation in oil prices, with a plausible scenario of prices exceeding $100 a barrel should conflicts intensify in the Middle East. He has estimated a 20% likelihood of inflation reaching a second peak, which would align with his bullish outlook for gold prices.
Yardeni’s forecast isn’t isolated, as other prominent economists, such as David Rosenberg, have also expressed optimism regarding the upward trajectory of gold prices. Rosenberg anticipates a potential 30% increase in gold prices, citing factors such as anticipated rate cuts by the Federal Reserve and heightened geopolitical tensions contributing to market risk.
