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The price of gold is expected to rise further in 2025, Wall Street analysts say, although the pace of gains is likely to slow after last year's 27 percent surge.
gold The price is expected to rise to about $2,795 an ounce by the end of the year, according to the average forecast of banks and refiners polled by the Financial Times. This represents about 7 percent above current levels.
The yellow metal is expected to continue to benefit from global buying Central bankswhich has been diversifying away from the dollar since the United States imposed sanctions on Russia after its 2022 all-out invasion of Ukraine.
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 lift prices. Such factors were behind the largest annual gain for bullion since 2010 last year.
“We think central bank interest will be a strong base for buying next year,” said Henrik Marks, head of global trading at Heraeus Precious Metals, who expects gold to reach highs of $2,950 an ounce this year.
He added that Trump's second presidential term is also likely to be supportive of gold prices. He added: “Whatever he announces will increase debt, which will lead to a weaker dollar and increased inflation. This is usually a great combination for gold.”
The World Gold Council said in a report that growth this year will be “positive but much more modest.”
The most optimistic call among those surveyed is from Goldman Sachs, which expects prices to reach $3,000 by the end of 2025. The bank cites the central bank's demand and expected interest rate cuts by the Federal Reserve.
The most pessimistic forecasts were from Barclays and Macquarie, both of which expect gold to fall to around $2,500 an ounce by the end of the year – a roughly 4 percent decline from current levels.
“Our base case out to 2025 is for gold to initially face continued pressure from a stronger US dollar, but supported by improved physical buying and stable official sector demand,” Macquarie analysts wrote in their year-end forecasts.
Global central banks bought 694 tons of gold during the first nine months of 2024. The People's Bank of China announced in November that it would resume buying gold after a six-month hiatus.
The decline in US interest rates contributed to gold's rise in the second half of last year, and the pace of additional cuts may be decisive for the yellow metal's outlook. Gold prices fell slightly after the Federal Reserve cut interest 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 presented one of the most favorable scenarios for gold, due to the potential for higher US fiscal spending and increased geopolitical uncertainty, said Michael Hay, head of commodities research at Société Générale.
“Momentum is regaining steam, coupled with geopolitical tensions, which will add more fuel to the fire,” said Hay, who expects gold prices to rise to $2,900 an ounce at the end of 2025.
