U.S. rate cut expectations and global central banks' gold purchases will boost gold.

TD Securities stated in a report that it expects gold prices to rise in the coming weeks,World's largest foreign exchange dealers supported by continued central bank purchases and clearer expectations of a U.S. rate cut.

TD believes that gold is likely to reach an average target price of $2,475 per ounce in the first quarter of 2025. Currently, spot gold prices are at $2,372.06 per ounce.

This week, the upward momentum in gold prices temporarily stalled due to reports that the People’s Bank of China stopped buying gold for the second consecutive month in June. This weakened the optimism for a rate cut driven by last week’s lower-than-expected U.S. non-farm payroll data.

However, TD pointed out that data showed the Reserve Bank of India, the National Bank of Poland, and the Czech National Bank were all buying gold this week, which has bolstered gold prices.

TD believes that central bank gold purchases, along with clearer expectations of a U.S. rate cut, could support gold prices in the coming months.

"As the official sector still appears interested in using gold to diversify their foreign exchange reserves, further investor purchases should drive gold prices to new highs when the timing of rate cuts becomes more predictable,” TD analysts wrote in the report.

In May this year, spot gold reached an all-time high of $2,450.06 per ounce, driven by increased safe-haven demand due to potential conflicts between Iran and Israel. However, gold prices did not remain at that level for long, quickly falling to a low of $2,280 per ounce, and slightly recovering in late June.

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