Why one broker thinks the gold price could glisten 9% brighter

ASX experts have outlined how investors can benefit from rising gold.

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a woman in a business suit holds a large solid gold bar in both hands with a superimposed image of a gagged gold line tracking upwards and featuring a swooping curved arrow pointing upwards.

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One of the most notable events in the investing world over 2024 so far has been the rising gold price.

Sure, this year has seen new all-time highs for a plethora of stock markets around the world. That includes our own S&P/ASX 200 Index (ASX: XJO) as well as other indexes like the Dow Jones Industrial Average Index(DJX: .DJI), the Nikkei 225 and the S&P 500 Index (SP: .INX).

But humans have been pricing gold for far longer than any stock exchange has been around. That makes the new record highs we've seen for this precious metal in 2024 arguably even more notable.

Gold ended 2023 at a price of roughly US$2,066 an ounce. But the metal has climbed significantly in 2024 so far, and last week hit a new record high of US$2,320 an ounce. Gold has continued to climb this week, with the price going above US$2,330 an ounce over the weekend.

That's some healthy appreciation to be sure.

But one ASX broker reckons the precious metal has further to climb.

According to one source, ASX broker Citi has raised its three-month gold price forecast to US$2,400 an ounce. If realised, that would see the yellow metal rise another 9% or so from where it is today.

Citi is also reportedly contemplating a "bullish wildcard scenario" of gold hitting US$3,000 an ounce over the next 12 months. Citi is basing these gold price predictions primarily on the likelihood that the US Federal Reserve will start cutting interest rates in 2024.

Gold is an investment that doesn't pay interest to its holders. As such, its attractiveness compared to other assets like cash and bonds increases when interest rates fall.

How to benefit from the rising gold price

Despite gold's impressive runup over the last few months, another ASX broker reckons there's still time to benefit from it.

As my Fool colleague James covered just this morning, ASX broker Goldman Sachs has recently named three ASX gold shares that it thinks are worth a buy right now.

Those were De Grey Mining Ltd (ASX: DEG), Evolution Mining Ltd (ASX: EVN) and Gold Road Resources Ltd (ASX: GOR). Goldman gave all three stocks a buy rating. But its most enthusiastic pick was Gold Road. The broker's 12-month share price target for this gold share was $2. That implies a potential upside for investors of around 18.3% over the coming year.

Goldman likes Gold Road's current balance sheet, as well as its share price. This, according to the broker, is "trading at a significant discount to peers".

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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