2025 forecast of gold prices
Gold prices rose by almost 27% at the levels of 2625 dollars per ounce, which is considered the largest net gain in one year ever, and the largest annual percentage gain in one year in 14 years, specifically since 2010.
Safe haven prices hit a record high in 2024, reaching an all-time high of USD 2,790 per ounce on October 31.
What are the factors that led to this historic rise of gold?
Several key factors drove gold's remarkable rise throughout 2024.
1 – Strong purchases by central banks, as central banks emerged as important buyers, which constantly added the precious metal to their reserves as part of a broader strategy to diversify their investments away from traditional currency holdings, which gave strong support to gold throughout the year.
2 – geopolitical uncertainty, as geopolitical tensions acted as another major catalyst, prompting investors to seek a safe haven in the traditional gold position.
3 – interest rate cuts by central banks the attractiveness of the metal has been enhanced by the policy shift especially by the Fed, which made three consecutive interest rate cuts by the end of the year, although the central bank indicated a more conservative approach to easing in 2025, under the second presidency of Donald Trump.
4 – retail investors, retail participation has added momentum to the strong rise in gold, especially during periods of uncertainty, through renewed interest from retail investors, as gold-related exchange – traded commodities have experienced significant inflows over the past year.
What are the forecasts for gold in 2025?
Analysts maintain a generally optimistic outlook in 2025, recognizing possible headwinds.
As market participants are closely watching many factors that may affect the course of Gold, Trump's victory in the US presidency has introduced new variables into the equation, with possible consequences for global trade policies and economic relations, however, increased geopolitical tensions under a potential Trump administration may lead to enhanced attractiveness of gold as a safe haven .
High inflation also means higher gold prices, when inflation rises, people start buying gold, because it retains its value better than cash, with a higher cost of living.
But what is interesting is that gold prices have remained high, even as inflation began to slow down, it may be the general uncertainty about the direction the economy is taking that is preventing gold prices from falling, which could give gold a new boost in 2025.
Forecasts indicate that gold prices may continue to rise during 2025, with varying estimates from analysts about the level of this rise, the following are some notable forecasts:
1 – Goldman Sachs :
the price of gold is expected to reach 3000 dollars per ounce by the end of 2025, driven by possible interest rate cuts and increased demand from central banks.
2 – UBS :
the price of gold is expected to reach 2900 dollars per ounce by the end of 2025, while continuing to outperform other commodities.
3 – the World Gold Council :
indicates that the pace of rising gold prices may slow down in 2025 after reaching a record level in 2024, influenced by factors such as economic growth and inflation.
In the end, it should be borne in mind that the expectations of financial markets are subject to change based on global economic and political developments, so it is always advisable to follow up on economic and geopolitical developments and data before making any investment decision.
