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The price of gold will rise further in 2025, Wall Street analysts say, although the pace of gains is likely to slow after last year’s bumper 27 percent surge.
Gold is expected to rise to around $2,795 per troy ounce by the end of the year, according to the average forecast from banks and refiners polled by the Financial Times. This is about 7 percent above current levels.
The yellow metal is expected to continue to benefit from buying by global central banks, which have diversified away from the dollar since the US imposed sanctions on Russia following its full-scale invasion of Ukraine in 2022.
Interest rate cuts by the US Federal Reserve, concerns about rising US government debt levels under President-elect Donald Trump and conflicts in the Middle East and Ukraine are also expected to boost prices. Such factors were behind silver bullion’s biggest annual gain since 2010 last year.
“We think central bank interest will be a strong basis for buying next year,” said Henrik Marx, global head of trading at Heraeus Precious Metals, who predicted gold could hit highs of $2,950 a barrel. troy ounce this year.
He added that Trump’s second presidential term is also likely to be supportive of gold prices. “Whatever he announces will increase the debt, leading to a weaker dollar and higher inflation.” This is usually a good mix for gold.”
The World Gold Council said in a report that growth this year would be “positive but much more modest.”
The best call among respondents is from Goldman Sachs, which expects prices to reach $3,000 by the end of 2025. The bank cites central bank demand and expected rate cuts by the Fed.
The lowest forecasts were from Barclays and Macquarie, both of which expect gold to fall to around $2,500 a troy ounce by the end of the year – a roughly 4 percent drop from current levels.
“Our base case in 2025 is for gold to initially face continued pressure from the strength of the US dollar, but to be supported by improved physical purchases and steady official sector demand,” Macquarie analysts wrote in their year-end outlook. .
Global central banks bought 694 tonnes of gold during the first nine months of 2024. The People’s Bank of China announced in November that it was resuming gold purchases after a six-month hiatus.
Falling interest rates in the US have contributed to gold’s rise in the second half of last year, and the pace of further cuts could be decisive for the outlook for the yellow metal. Gold prices retreated slightly after the Fed cut rates in December, but indicated that borrowing costs will fall more slowly than previously expected in 2025.
Because gold is a non-yielding asset, it typically benefits from lower interest rates because the opportunity cost of holding it is lower.
Trump’s election victory in November has provided one of the most favorable scenarios for gold, due to the likelihood of increased US fiscal spending and increased geopolitical uncertainty, said Michael Haigh, head of commodities research at Société Générale.
“Momentum is returning, combined with geopolitical tensions, which will add more fuel to the fire,” said Haigh, who expected gold prices to rise to $2,900 per troy ounce by the end of 2025.
