Gold prices could surge to $3,500 an ounce by the end of next year, according to market veteran Ed Yardeni. This would represent a nearly 50% increase in the value of gold, should inflation experience a second peak. Other economists have also warned of a potential second peak in inflation due to lingering price pressures in the economy.
Yardeni has suggested that gold prices could continue to soar through 2025 if inflation begins to rise again. Drawing parallels to the 1970s, when gold prices surged along with inflation, he pointed out that gold could reach $3,500 an ounce by the end of the year. Factors contributing to this potential increase include supply chain disruptions, geopolitical conflicts, and a strong US labor market.
Inflation has somewhat cooled down from the previous highs but there are concerns of a resurgence due to various factors like supply chain issues and geopolitical conflicts. Rising oil prices are also contributing to this inflationary pressure, with Brent crude surpassing $90 a barrel recently. Yardeni predicted that oil prices could exceed $100 a barrel if Middle East conflicts intensify, further fueling inflation.
Other forecasts suggest more upside for gold prices in the coming years as well. According to economist David Rosenberg, there is a 20% chance that inflation could reach a second peak, leading to a bullish run for gold. Supply chain disruptions and geopolitical tensions are likely to be major contributors
