There will be a significant increase in gold prices in 2025, with some analysts predicting prices as high as USD3,000/oz (RM430/g). This bullish outlook is driven by several factors, including:
- Strong Central Bank Demand: Central banks continue to diversify their reserves by purchasing gold, supporting prices.
- Geopolitical Uncertainty: Global tensions and economic uncertainty are driving investors towards safe-haven assets like gold.
- Lower Interest Rates: The Federal Reserve’s interest rate cuts have made gold, which doesn’t pay interest, more attractive to investors.
Short-term Forecast:
- Expect sideways trading with limited momentum in the near future.
- Prices are likely to hover around the USD2,500/oz (RM360/g) level.
- A decline in the 10-year US Treasury yield could significantly boost gold prices.
Long-term Forecast:
- Potential for significant upside, with some analysts predicting prices reaching $3,000 per ounce.
- Factors driving potential gains include strong central bank demand and geopolitical uncertainty.
- A potential Trump presidency could further increase demand for gold as a safe-haven asset.
Headwinds:
- Rising interest rates and a strong US dollar could limit gold’s upward momentum.
- The Fed’s recent indication of fewer rate cuts could also dampen investor enthusiasm.
Recent developments:
Gold prices have seen a positive start to 2025, supported by a weaker US dollar and concerns about the Chinese economy.
However, the strength of the US dollar and potential Fed policy shifts could cap further gains.
Overall:
Gold prices are likely to experience volatility in 2025, with both bullish and bearish factors at play. While the potential for significant gains exists, investors should be mindful of the potential headwinds and exercise caution.