Gold is expected to continue its upward trend in 2025, with Wall Street analysts predicting a 7% rise in the price of the yellow metal to approximately $2,795 per troy ounce by the end of the year. This follows a substantial 27% gain in 2024, marking its biggest annual surge since 2010. According to a report by the Financial Times, the rally is anticipated to be fueled by global central bank demand, which has been a key driver behind gold’s recent performance.
Gold’s rise is largely attributed to a shift in central bank strategies, particularly in response to the geopolitical fallout from the war in Ukraine. Since the US imposed sanctions on Russia following its invasion in 2022, central banks worldwide have been diversifying their foreign exchange reserves away from the US dollar. This shift has resulted in a surge in gold purchases, as nations look for safe-haven assets. In 2024 alone, global central banks bought 694 tonnes of gold, with China’s People’s Bank of resuming its gold buying program after a six-month hiatus.
Henrik Marx, global head of trading at Heraeus Precious Metals, highlighted that central bank interest will continue to provide a solid foundation for gold in 2025. He also pointed to the potential for gold prices to hit $2,950 per ounce, particularly with expectations of continued fiscal spending under the incoming US president, Donald Trump. “Whatever he announces will increase debt, leading to a weaker dollar and increased inflation. That is usually a nice mixture for gold,” said Marx.
Geopolitical tensions, including conflicts in the Middle East and Ukraine, are expected to further support the yellow metal’s appeal as a safe-haven asset. The uncertainty surrounding the fiscal policies of the new US administration, combined with rising concerns about growing US government debt levels, are also seen as factors likely to benefit gold.
Although most analysts agree on the positive outlook for gold, they predict a more moderate pace of growth compared to the previous year. The World Gold Council stated that while gold’s outlook for 2025 is “positive,” it will likely be more modest than in 2024. Among the analysts surveyed by the Financial Times, the most bullish forecast comes from Goldman Sachs, which expects gold to reach $3,000 per ounce by the end of 2025. This forecast is driven by continued central bank demand and the expectation of further rate cuts by the US Federal Reserve.
On the other hand, some analysts, including those from Barclays and Macquarie, have a more cautious outlook. Both firms anticipate gold prices could dip to around $2,500 per ounce by the end of 2025, citing potential pressure from a stronger US dollar in the early part of the year.
Despite these differing views, analysts agree that gold will remain supported by demand from central banks and physical buying, alongside geopolitical and macroeconomic factors. The decline in US interest rates in 2024 has contributed significantly to gold’s rally, and the pace of future rate cuts will be a key factor in determining how much further gold prices can climb.
Michael Haigh, head of commodities research at Société Générale, noted that Trump’s election victory has created a favorable scenario for gold due to the likelihood of higher US fiscal spending and increased geopolitical uncertainty. “Momentum is taking back over, combined with geopolitical tensions, which is going to add more fuel to the fire,” said Haigh. He forecasts that gold could reach $2,900 per ounce by the end of 2025.
