Gold prices are set to maintain their upward trajectory in 2025, with experts forecasting further record highs driven by strong demand for the precious metal. The surge is largely attributed to its role as a safe-haven asset, attracting investors seeking stability amid geopolitical tensions, central bank purchases, and the US Federal Reserve’s anticipated rate cuts.
In 2024, gold reached unprecedented heights, hitting an all-time peak of $2,790 per ounce in October. By the end of the year, it had risen from around $2,062 to $2,620, marking a 27% increase and the best annual performance for the metal since 2010. Throughout the year, gold prices broke records 40 times, and total demand surpassed $100 billion for the first time in the third quarter.
Gold’s rise was particularly notable in October, when it closed at $2,743 per ounce, up 4.15% from the previous month. The ongoing geopolitical crises in Ukraine and Palestine, alongside tensions with Iran, fueled demand for the metal. Political instability in the US, especially surrounding the presidential election, further bolstered investor interest. In addition, strong demand from Asia contributed to the price hikes.
The World Gold Council’s latest report emphasized that gold’s demand surged as geopolitical risks and market volatility increased. Experts believe these factors, coupled with central bank purchases, will continue to drive gold prices higher in the coming year.
Ewa Manthey, a commodities strategist at ING, forecasted that the favorable macroeconomic environment for gold would persist into 2025. Manthey noted that the anticipated inflationary impact of US policies under President-elect Donald Trump could slow the pace of expected interest rate cuts, strengthening the case for gold. Despite a slowdown in central bank gold purchases in the third quarter, Manthey believes central banks will continue to buy gold due to ongoing geopolitical tensions and economic instability. She projected that gold could reach an average price of $2,760 per ounce in 2025.
“Gold’s safe-haven appeal, combined with central bank purchases and geopolitical uncertainty, will likely push prices to new heights in the short to medium term,” Manthey said. She also highlighted that Trump’s protectionist policies could exacerbate inflationary pressures, potentially limiting the Federal Reserve’s ability to cut interest rates, which could further support gold.
Juan Carlos Artigas, Global Head of Research at the World Gold Council, shared a similar outlook. He suggested that 2025 could unfold in two phases for gold. Initially, markets may experience a “risk-on” phase as investors await clarity on key drivers for the metal’s performance. However, Artigas expects a surge in demand later in the year, particularly if interest rates fall significantly or market volatility increases.
“Gold’s prospects for 2025 will depend on a combination of interest rates, market volatility, and central bank demand, with Asian markets continuing to play a crucial role,” Artigas said.
With geopolitical uncertainties showing no signs of abating and the economic landscape remaining volatile, gold is poised to remain a critical asset for investors seeking security. As tensions rise globally, the demand for gold as a store of value is likely to keep pushing prices higher in the year ahead.
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