Investor dollars are shifting towards gold, resulting in the first quarterly net build in over two years, driving prices to new highs. Central bank buying is on track to hit near-record levels this year, providing a strong tailwind for the gold market.

Gold prices are trending strongly higher in 2024, supported by record demand, and are likely to hit new highs this year and again in 2025. The latest data from the World Gold Council shows a 5% increase in total FQ3 volume demand, fueled by investment inflows driven by falling interest rates.

Gold ETF investment demand was positive in Q3 for the first time in two and a half years, while OTC investment in gold saw a significant increase year over year. The shift in market dynamics aligns with the changing central bank policies globally.

The Gold Price Has Strong Tailwinds to Drive It Higher

Jewelry sales, which account for about 45% of the total gold market, fell due to higher prices, but developments in India are expected to boost demand quality. India’s budget changes, including reductions in import duty and long-term capital gains tax, are critical factors for gold prices.

Central bank demand remains strong, with emerging markets expected to continue buying robustly in 2025. Artificial intelligence and technology are also driving gold prices, with demand increasing for technological and electronic purposes.

Artificial Intelligence Drives Demand for Gold

Technological advancements are increasing the demand for gold in electronic and industrial applications. The price action in gold is bullish, with momentum increasing monthly and charts indicating higher prices to come. Critical support levels are being closely monitored to gauge potential price corrections.

In conclusion, gold prices are on the rise in 2025 due to strong investment demand, central bank buying, and technological advancements. Investors should consider adding gold to their portfolios as a long-term investment option, especially in a falling interest rate environment.

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