AXMIN Inc (TSXV: AXM)
AXMIN Inc. (TSXV:AXM) is a Canadian-based exploration and development company with a strong focus on central and West Africa.
On Monday, gold prices saw lackluster trading and declined further, pointing to the first December decline since 2016. Spot gold prices fell by 0.6% to $2,606.50 per ounce, significantly below October’s high of over $2,790. However, looking ahead to the new year, investors and analysts remain optimistic about the gold market’s prospects.
Reflecting on 2024, gold experienced a strong upward trend. The price of gold rose by 26%, spurred by U.S. monetary easing, ongoing geopolitical risks, and significant gold purchases by central banks, achieving approximately 40 all-time highs during the year. While gold prices have retreated slightly since November, following Donald Trump’s victory in the U.S. presidential election, the annual gains still outpaced most other commodities.
David Scutt, an analyst at StoneX Group, noted in a report that gold’s performance this year has been both stunning and exceptional, suggesting a shift in traditional market dynamics. Historically, a stronger dollar and rising real yields on U.S. Treasury bonds would weigh on gold, but this year has defied that logic.
Chantele Schieven, head of research at Capitalight Research, expressed her confidence in the gold market despite its recent weakness. She highlighted gold’s resilience in a challenging environment and described the volatility seen for the first time this year as a “healthy correction for the market.”
Looking forward to 2025, Schieven remains bullish on gold. However, she cautioned that investors will need patience, as the current consolidation phase could last for several months. She forecasts gold prices to remain between $2,500 and $2,700 per ounce in the first half of 2025, with potential to break above $3,000 per ounce in the second half. While Trump’s policies may provide a short-term boost to the economy, lifting bond yields and strengthening the dollar, she warned that they could exacerbate inflation pressures.
“A moderate recession combined with higher inflation creates the ideal environment for gold to thrive,” she said.
Fawad Razaqzada, a market analyst at City Index, shares similar sentiments. Despite near-term headwinds, he sees a pathway for gold prices to reach the $3,000 mark in 2025. This forecast is supported by factors such as inflation bolstering gold’s role as a safe-haven asset, geopolitical instability in the Middle East, and potential trade wars reigniting risk-averse sentiment. Additionally, a reversal in Trump’s trade policies and central banks around the globe increasing their gold reserves could provide further support for gold prices.
Central banks, particularly China, played a pivotal role in the gold market in 2024.
Hamad Hussain, an assistant economist specializing in climate and commodities at Capital Economics, noted that weak economic activity and a depreciating yuan are likely to further drive China’s gold demand in the coming year. China’s central bank recently resumed gold purchases in November after a six-month pause, adding only 5 tons but signaling a continued interest in gold accumulation. Currently, gold accounts for merely 5% of China’s total foreign reserves.
With the combination of central bank demand, inflationary pressures, and global uncertainty, analysts predict that gold will remain a vital asset for hedging risks and maintaining value in 2025.
