Asian investors, led by Chinese consumers, have driven gold prices to record highs in the first half of this year.

Now, an international bank predicts that Western investors will take up the baton and push gold prices to new historical highs.

Last week, Bernard Dahdah, a precious metals analyst at Natixis, released the latest price forecast, estimating that the average price of gold in 2025 will be around $2,600 per ounce.

In his report, he stated: "After a strong start to the year, the Chinese market has now cooled down.

One indicator reflecting this is the Shanghai gold premium, which has been trading at a discount for most of August."

"Meanwhile, following a nearly 9% increase in prices since July, we have seen physical gold ETFs (mainly held by Western investors) finally rise again after nearly a year of outflows."

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Dahdah added that with the weakening of the US dollar and the decline in bond yields, market drivers are returning to traditional fundamentals, and he is optimistic about the outlook.

However, he pointed out that the decline in interest rates and yields may be limited, at least for the rest of 2024.

Following disappointing employment data, the market's expectation for a 50-basis-point rate cut has risen sharply after the number of job vacancies decreased in July.

According to data from the Chicago Mercantile Exchange's FedWatch tool, the market currently sees a 45% chance of aggressive easing later this month.

However, Natixis expects the rate to slow down.

He said: "Our forecast differs from the consensus because we believe the Fed will not consider the economic situation severe enough to require rapid consecutive cuts and will still be concerned about persistently higher-than-target inflation."

"Although the job market is slowing down, it is normalizing and aligning with the target inflation rate, and it has not yet fallen into complete weakness.

This dynamic will allow the Fed to gradually ease policy, with a 25-basis-point rate cut in September and another 25-basis-point cut in December, totaling a 50-basis-point rate cut in 2024."

Dahdah added that Natixis expects interest rates to fall to 3.25% in 2025, which will provide good support for gold prices.

He said: "We believe that for the rest of this year, prices will hover around the current level, as most of this year's rate cuts have already been factored in.

That said, next year, we may see prices rise more quickly, especially in the second half."