The gold market in 2025 will be unpredictable due to the influence of many complex factors. Investors need to consider carefully before making investment decisions.
Gold market more unpredictable
Although global interest rates may fall in 2025, creating favorable conditions for gold prices, the latest report from the World Gold Council (WGC) said that the gold market next year will be quite complex and unpredictable. WGC said that investor sentiment is unstable, leading to two possible scenarios. However, the most likely scenario is that gold prices will not fluctuate much if the market situation does not change.
In 2024, gold prices continued to hit record highs despite the US Federal Reserve (Fed) maintaining a long-term tight monetary policy. The main reason was strong demand for gold from central banks and Asian consumers. In the summer, when Asian demand decreased, Western investors entered the market when the Fed began to loosen its policy, further pushing gold prices higher.
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| The World Gold Council predicts that gold prices will have difficulty breaking through in 2025. Photo: Kitco |
The WGC believes that the gold market in 2025 will be much more unpredictable. Investors will need to consider the global economic situation more carefully. "The market consensus on key macro variables such as GDP, yields and inflation - viewed objectively - suggests that gold will grow positively but at a much more modest pace in 2025. Prices could rise further if central bank demand is stronger than expected or if financial conditions deteriorate rapidly, leading to capital flows into safe-haven assets. Conversely, a reversal of monetary policy, leading to higher interest rates, could create more headwinds for gold," the World Gold Council report said.
On the other hand, commodity strategist Ewa Manthey wrote in ING's 2025 gold forecast that an optimistic macro picture combined with continued geopolitical risks and strong central bank buying will push gold prices to new highs in 2025.
“Gold has been one of the best performers among major commodities this year. The precious metal has gained more than 25% year-to-date, hitting a series of records, supported by optimism about interest rate cuts, strong central bank buying and strong Asian buying,” said Ewa Manthey.
Many factors affect gold prices
The WGC believes that the world gold price in 2025 will be affected by many complex factors, not only depending on the Fed's decision and the value of the USD. To make an accurate forecast, the WGC has considered both the supply and demand of gold in the market.
Gold demand from Asian consumers is expected to continue to support gold prices, especially in the first half of 2025, but will depend on the domestic economic situation in China. Gold will also have to compete with other investment channels such as stocks and real estate.
In addition, central banks around the world will likely continue to buy gold, although not as much as before. The WGC predicts that central bank demand for gold in 2025 will still be higher than the long-term average. This will help prevent gold prices from falling too far.
“Central bank purchases are policy-driven and therefore difficult to forecast. However, our surveys and analysis suggest that the current trend will persist. In our view, demand beyond 500 tonnes (the approximate long-term trend) will still have a net positive impact on performance. We believe that central bank demand in 2025 will exceed that level,” the analysts said .
Notably, the People's Bank of China (PBOC) recently announced that it would resume gold purchases after a 6-month hiatus. This could boost overall gold demand in China. Previously, in 2023, China was the world's largest gold buyer. However, since May this year, China has temporarily stopped buying additional gold to its reserves.
“The most important factor affecting the market is the PBOC’s announcement of gold purchases again,” said Bart Melek, head of commodity strategy at TD Securities. “The market is optimistic that other central banks will follow China’s lead and gold purchases will return on a large scale.”
Overall, the World Gold Council believes that gold prices in 2025 will be quite "tug of war", neither increasing nor decreasing sharply. There are many factors that can affect gold prices, both positive and negative, and it is difficult to predict the exact fate of gold in the coming year.
Source: https://congthuong.vn/hoi-dong-vang-the-gioi-gia-vang-se-giang-co-trong-nam-2025-364152.html
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