Many analysts anticipate that gold prices will hit $3,000 per ounce in 2025, with this surge likely occurring in the second half of the year. Currently hovering around $2,630 per ounce, the projected target for next year represents a 13% increase compared to the nearly 30% rise seen this year.
In a recent interview, Chantelle Schieven, Head of Research at Capitalight Research, stated that the gold market is in a "wait-and-see" mode as investors evaluate the economic outlook amid persistent inflation in the United States.
Gold Holds Strong Amid Challenges
Despite stabilizing since peaking in late October, Schieven noted that the market has maintained its gains despite significant headwinds. As the new year approaches, gold has established crucial support around $2,600 per ounce, following the Federal Reserve's indication in its final monetary policy meeting of 2024 that the pace of interest rate cuts will slow next year. According to updated economic projections, the Fed now expects to lower rates only twice in 2025, compared to the four cuts anticipated in September.
Schieven predicts gold prices will range between $2,500 and $2,700 per ounce in the first half of 2025 but expects a rally in the second half, pushing prices above $3,000 per ounce.
Optimistic Global Bank Forecasts
At the start of 2024, Schieven was the most bullish analyst in the London Bullion Market Association’s annual forecast survey. She commented: "I remain as optimistic about gold in 2025 as I was in 2024, but the gold market now needs a short breather."
Bank of America also expects gold prices to stabilize in the first half of 2024 but predicts they will surpass $3,000 per ounce. Michael Widmer, Managing Director and Head of Metals Research at the bank, stated during an annual forecast seminar: "The current environment provides little tangible incentive for investors to re-enter the gold market."
Commodity analysts at the second-largest U.S. bank identified several challenges for gold, including elevated bond yields and a potentially stronger U.S. dollar. They added, "The Trump administration is likely to pursue a mix of policies that boost growth, inflation, interest rates, and the U.S. dollar, which could dampen investor appetite for gold in the near term."
Global Demand as a Key Driver
Despite these challenges, many investors are focusing on global trends. John LaForge, Head of Real Asset Strategy at Wells Fargo, emphasized that demand for gold from central banks in emerging markets will be a significant driver of prices. He noted that these nations are continuing to diversify their reserves away from the U.S. dollar.
"Most emerging markets holding gold in their reserves still allocate only a small fraction—between 1% and 2%. I believe this trend has substantial room to grow," LaForge added.
Consumer Demand Gains Momentum
As 2024 begins, record central bank purchases and unprecedented demand from Asian consumers and investors, particularly in China, have driven gold prices higher. While central bank purchases have slowed in recent months, they remain net buyers, a trend expected to continue strongly through 2025.
Meanwhile, jewelry demand in India may face short-term pressure due to unfavorable religious periods for gold purchases. However, investment demand remains a key support for the market.
Positive Outlook for 2025
In its 2025 forecast, State Street Global Advisors assigned a 50% probability for gold to trade between $2,600 and $2,900 per ounce, a 30% chance for prices between $2,900 and $3,100, and only a 20% likelihood of sustained declines below $2,600.
George Milling-Stanley, Chief Gold Strategist at State Street, remarked: "I have no concerns about the Federal Reserve's monetary policy. I do not anticipate any sustained weakness in gold prices for 2025. Strong economic fundamentals will support gold next year."
