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Will Gold Surpass $3,000 in 2025?

INVESTINGWill Gold Surpass $3,000 in 2025?

The year 2025 is poised to bring further assertiveness from China in the global economy and continued isolationism from the United States under Donald Trump. For gold, this could mean heightened instability and volatility, although a long-term upward trajectory seems more likely than a decline. Some forecasts even suggest that gold could surpass the symbolic $3,000 per ounce mark.

A Strong Start for Gold in 2025

The new year on the gold market began with gains, as the price of an ounce of the precious metal rose by several dozen dollars in the first days of January compared to the end of 2024. As of Tuesday, January 7, at 3:30 PM, the price of gold stands at approximately $2,658 per ounce.

What Awaits the Gold Market in 2025?

The year 2025 is shaping up to be a period of dynamic changes in financial markets and the global economy. Amid growing geopolitical tensions, anticipated shifts in economic policies, and fluctuating commodity prices, many investors and consumers are asking: how will the gold market develop?

Gold, a symbol of financial stability, had a very successful 2024, setting multiple all-time highs (ATH), although the year ended with a price correction. Forecasts for 2025 indicate a continuation of growth, with leading financial institutions predicting new record highs for gold prices:

  • Goldman Sachs: $2,910 per ounce by the end of 2025, reaching $3,000 by mid-2026.
  • UBS: $2,900 by the end of 2025 and $2,950 in 2026.
  • Heraeus Precious Metals: A range of $2,450–$2,950.
  • Citigroup: $2,800–$3,200 within a few years, with a strong likelihood of hitting these levels in 2025.
  • Bank of America: $3,000, provided inflation and global tensions intensify.

Drivers of Price Growth

  1. Global Inflation Trends and Interest Rate Policies
    Central banks are expected to implement rate cuts in response to inflation. The U.S. Federal Reserve has already adjusted its rhetoric regarding the pace of cuts in 2025, anticipating inflation to remain a factor.
    In Poland, 2025 could bring moderate improvements in inflation, projected at an average of 4.3% by the National Bank of Poland (NBP) and around 4.5% by experts from Analizy.pl. A new projection in March could revise these figures.
  2. Geopolitical Instability
    The potential end of the war in Ukraine and its economic repercussions will be critical. While a resolution could stabilize energy and metal prices, an escalation of conflicts elsewhere, such as the Middle East, could increase demand for gold as a safe-haven asset.
  3. Weakened Dollar and Alternative Assets
    With growing dedollarization trends and the rise of alternative reserve currencies, gold could gain prominence as a universal hedge for global investors.

The Impact of Donald Trump’s Presidency

Donald Trump’s second term, starting on January 20, is expected to significantly influence global dynamics. Two key areas include the war in Ukraine and its potential resolution, and the U.S.-China trade war, which could escalate global inflation risks.

  • Trade Wars
    A renewed trade war could boost U.S. economic growth and encourage reshoring of production, but it may also raise inflation in the U.S. and globally. Potential tariffs on European goods could lower EU exports to the U.S., while a weaker dollar might increase the attractiveness of U.S. imports but raise borrowing costs for EU businesses with dollar-denominated debt.

Saxo Bank’s Bold Predictions for 2025

Saxo Bank’s annual forecasts often challenge conventional thinking, offering food for thought on global economic trends. Key predictions include:

  1. Trump’s Dollar Disruption
    Donald Trump has threatened hefty tariffs on those challenging the dollar’s role in the global economy, pushing countries like China and others in the BRICS bloc toward dedollarization. Saxo Bank analysts predict a 20% decline in the dollar’s value against major currencies and a 30% drop against gold.
  2. China’s Economic Revival
    Saxo Bank foresees China launching a massive fiscal package worth 50 trillion yuan ($7 trillion) to stimulate its economy, including direct cash transfers to consumers and initiatives to improve quality of life and demographics.
  3. The End of OPEC’s Dominance
    The ongoing electrification boom could diminish the importance of oil and, by extension, OPEC. While oil won’t disappear, its significance will wane, leading to lower prices and the phasing out of expensive shale oil extraction.

An Intense and Exciting Year Ahead

The year 2025 promises to be intense, following the trajectory observed in 2024. While inflation may normalize, the road to stability is likely to be bumpy, with potential obstacles along the way.

Gold appears to remain a safe haven, particularly amid a weakening dollar and rising inflation. Global political events, such as Trump’s return and China’s economic actions, will have far-reaching consequences for the economy.

This year will require flexibility, prudence, and adaptability from both investors and consumers. For gold, greater instability and volatility seem likely, but a long-term upward movement remains the most probable scenario.

By Michał Tekliński, Gold Market Expert at Goldsaver.pl, Goldenmark Group
Source: Manager Plus

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