Gold Rally Predicted for 2025: Wall Street Banks Forecast Growth
The comments below are an edited and abridged synopsis of an article by Leslie Hook, Financial Times
(531 words, 3 minutes read time.)
The gold price is projected to climb further in 2025, although the pace of gains is expected to slow following a remarkable 27% rally last year. Wall Street analysts and global refiners surveyed by the Financial Times anticipate gold reaching an average of US$2,795 per troy ounce by the end of the year, approximately 7% above current levels.
The ongoing demand for gold from central banks remains a key driver of this positive outlook. Since 2022, when sanctions were imposed on Russia following its invasion of Ukraine, central banks have been actively diversifying away from the US dollar. This strategic shift continues to bolster gold’s appeal as a safe-haven asset.
Additional factors supporting gold’s rise include anticipated interest rate cuts by the US Federal Reserve, concerns over rising US government debt under President-elect Donald Trump, and heightened geopolitical risks stemming from conflicts in the Middle East and Ukraine. These dynamics contributed to gold’s significant performance last year, marking its largest annual gain since 2010.
Henrik Marx, Global Head of Trading at Heraeus Precious Metals, predicts that central bank interest will remain a strong foundation for gold demand. He suggests that gold could reach highs of $2,950 in 2025. Marx also notes that Trump’s return to office is expected to support a higher gold price, citing potential fiscal policies that could increase debt, weaken the US dollar, and drive inflation—conditions historically favourable for gold.
The World Gold Council echoes this optimism but tempers expectations, describing 2025 growth as “positive but much more modest.” Among surveyed institutions, Goldman Sachs offers the most bullish outlook, forecasting gold to hit $3,000 by year end. The bank attributes this to robust central bank demand and upcoming Fed rate cuts.
Conversely, more conservative forecasts from Barclays and Macquarie suggest gold could dip to $2,500 by the end of the year, reflecting a potential 4% decline. Macquarie analysts highlight near-term pressure from US dollar strength but expect support from improved physical buying and steady official sector demand.
Central bank activity underscores gold’s importance in the global financial landscape. In the first nine months of 2024 alone, central banks purchased 694 tonnes of gold. Notably, the People’s Bank of China resumed its gold acquisitions in November after a six-month pause.
Interest rate movements also play a pivotal role in shaping gold’s trajectory. Falling rates during the latter half of 2024 fuelled gold’s rally, and further rate cuts in 2025 could sustain this trend. However, slower-than-expected cuts might temper gains, as seen in December when the Fed signalled a cautious approach to reducing borrowing costs.
Michael Haigh, Head of Commodities Research at Société Générale, believes momentum and geopolitical tensions will drive gold higher, predicting a rise to $2,900 by the end of 2025. As uncertainty looms over global markets, gold’s enduring appeal as a non-yielding, inflation-resistant asset remains strong.
For investors, gold continues to offer a compelling hedge against economic and geopolitical volatility, with central bank activity and monetary policy expected to shape its performance in the year ahead.