During the first few days of 2025, the price of gold has fluctuated between $2,620 and $2,660. While it reached a peak of $2,790 last fall, the rally has since subsided. However, Wall Street analysts are now predicting that the price of the precious metal will surpass the previous peak.
According to a consensus among analysts interviewed by the Financial Times, the price is expected to reach $2,795 by the end of the year. Factors driving this increase include central bank purchases, interest rate cuts by the Fed, President Trump’s administration, and conflicts in the Middle East and Ukraine.
Henrik Marx, the global head of trading at Heraeus Precious Metals, believes that the price could climb to $2,950, partially fueled by Donald Trump’s policies. “Whatever he announces will increase debt, leading to a weaker dollar and increased inflation. This is typically a nice mix for gold,” Marx told FT.
Goldman Sachs is the most optimistic of the analysts, forecasting a price of $3,000 by the end of 2025. This is largely due to demand from central banks and expected rate cuts by the Fed. On the other hand, Barclays and Macquarie predict that gold will plateau and drop to around $2,500 by the end of the year.
“Our base case going into 2025 is that gold will face pressure from dollar strength, but supported by improved physical purchases and steady demand,” said a Macquarie analyst in a statement.
Global central banks purchased 694 tons of gold during the first nine months of 2024. The People’s Bank of China announced in November that they would resume gold purchases after a six-month hiatus.
In conclusion, the outlook for gold prices in 2025 is mixed, with some analysts bullish on the precious metal’s prospects while others are more cautious. Factors such as central bank purchases, interest rate policies, and geopolitical tensions will continue to influence the price of gold in the coming months. Stay tuned for updates on this evolving market trend.