Gold is poised to see further gains in 2025, though the pace of growth is likely to moderate following a substantial 27% surge last year, according to analysts from Wall Street banks. The price of the precious metal is forecasted to reach approximately $2,795 per troy ounce by the end of this year, marking a 7% increase from current levels, based on the average predictions of banks and refiners surveyed by The Financial Times.
Central bank buying remains a key driver of gold’s performance, with global central banks diversifying away from the US dollar—especially since the US imposed sanctions on Russia in response to its 2022 invasion of Ukraine. Analysts also anticipate that factors such as interest rate cuts by the Federal Reserve, concerns over growing US government debt, and geopolitical tensions in the Middle East and Ukraine will continue to bolster the metal’s value.
These same dynamics fueled gold’s strongest annual performance since 2010 in the previous year. Henrik Marx, global head of trading at Heraeus Precious Metals, noted that central bank demand is expected to provide a solid foundation for further purchases in 2025. “We believe central bank interest will be a strong base for the buying next year,” Marx said, predicting gold could reach as high as $2,950 per troy ounce this year.
Marx also pointed to the potential impact of Donald Trump’s second presidential term, suggesting that any fiscal policies he implements could weaken the dollar and heighten inflation, which typically benefits gold. “Whatever he announces will increase debt, leading to a weaker dollar and increased inflation. That is usually a favorable mix for gold,” he added.
The World Gold Council also projected positive growth for gold this year, although it expects the gains to be “much more modest” than those seen in 2024.
Among the analysts surveyed, Goldman Sachs holds the most optimistic view, forecasting that gold prices could climb to $3,000 per ounce by the end of 2025, driven by continued central bank demand and anticipated rate cuts from the Fed. Meanwhile, Barclays and Macquarie presented more cautious outlooks, both predicting a dip in gold prices to around $2,500 per ounce by year-end, reflecting a potential 4% drop from current levels.
Macquarie analysts highlighted that their base case for 2025 involves gold initially facing downward pressure from a stronger US dollar, but receiving support from increased physical buying and steady demand from official sectors. “We expect gold to face ongoing pressure from US dollar strength but to be supported by improved physical buying and steady official sector demand,” Macquarie analysts wrote in their year-end outlook.
Gold’s strong performance in 2024 was partially driven by falling US interest rates, which reduce the opportunity cost of holding the non-yielding asset. While the Fed cut rates in December, it indicated that further reductions in borrowing costs would be slower than expected in 2025, which could have a significant impact on gold prices going forward.
So far in 2024, global central banks have purchased a total of 694 tonnes of gold, with the People’s Bank of China resuming its gold purchases in November after a six-month pause.
Société Générale’s Michael Haigh highlighted that the current political landscape, particularly Trump’s election victory and the potential for increased US fiscal spending, presents one of the most favorable environments for gold in recent years. “Momentum is taking back over, combined with geopolitical tensions, which will likely add more fuel to the fire,” Haigh said, forecasting that gold prices could rise to $2,900 per ounce by the end of 2025.
As geopolitical uncertainties and fiscal policies continue to shape the market, gold remains a key asset for investors navigating a volatile global economy.
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