Why gold will reach $US3300 per ounce

Gold has soared past $US3000 per ounce without breaking a sweat, marking a significant milestone in its ongoing rally.

Gold’s price surge, which began in November 2022, is not just a reflection of strong demand but also a response to deepening global economic and political uncertainties.

According to Saxo’s head of commodity strategy Ole Hansen, multiple factors are driving gold’s rise, some of which could have lasting impacts on its trajectory.

“Central banks, mainly in emerging markets, have bought more than 1000 tonnes of gold annually for the past three years in a row,” he said.

“Gold is seen as a hedge or protection against fiscal debt worries because of its historical role as a store of value and its tendency to hold or increase in price during times of economic uncertainty.

“In the past 25 years, government debt levels have exploded, not least in the US, raising some concerns it ultimately could lead to a crisis, in which case gold will act as a protection against the fallout.”

Historically, gold has performed well in US rate-cutting cycles, and with the Federal Reserve expected to ease financial conditions later this year, further gains could be on the horizon.

“Gold tends to do well during US rate-cutting cycles, and while the US Federal Reserve has paused for now, the deteriorating outlook for the US economy has lifted expectations for further rate cuts later this year,” Hansen said.

“Government debt levels have exploded, not least in the US, raising concerns that it could ultimately lead to a crisis, in which case gold will act as protection against the fallout.”

While short-term volatility is expected, Saxo has raised its 2025 gold price forecast to $US3300 per ounce. Profit-taking could trigger temporary corrections if geopolitical tensions ease or economic stability improves.

Record-breaking prices comes amid a major consolidation move in the local gold sector.

Ramelius Resources is set to acquire the remaining Spartan Resources shares it does not already own in a deal worth approximately $2.4 billion.

Under the agreement, Spartan shareholders will receive $0.25 in cash and 0.6957 Ramelius shares per Spartan share, implying a value of $1.78 per share.

The offer represents an 11.3 per cent premium to Spartan’s last closing price of $1.60 on March 14 and a 27.5 per cent premium to its 30-day volume-weighted average price of $1.40.