How Will Gold Perform in 2025? Retail and Institutional Investors Reach a “Consensus”
Based on market data and expert analysis, the majority of retail investors expect gold prices to break above $3,000 per ounce in 2025. Experts, however, predict that gold may consolidate in the first half of the year before seeing substantial gains in the second half.
Review of Gold’s Market in 2024: Record-Setting Performance Sparks Optimism
In 2024, gold showed remarkable performance, with an annual increase of nearly 30%, becoming one of the best-performing commodities and even surpassing most asset classes. At the start of 2024, spot gold traded near the $2,000 level, peaking at a record $2,788.54 on October 30. However, following Donald Trump’s victory in the U.S. presidential election in November, gold prices fell but managed to hold steady above the $2,600 support level for the rest of the year.
Outlook for 2025: Retail Investors Show Strong Confidence, Wall Street Analysts Cautiously Optimistic
Retail Investors’ Bullish Sentiment
The Kitco News annual gold survey revealed that out of 457 retail investors, the majority believe gold prices will exceed the $3,000-per-ounce mark in 2025. Responses were as follows:
- 58% (266 investors) predict gold will rise above $3,000.
- 22% (103 investors) expect prices to stay between $2,800 and $3,000.
- 7% (30 investors) believe gold will trade between $2,600 and $2,800.
- 13% (58 investors) think gold could fall back to the $2,400−$2,600 range.
Experts Are Cautious but Still Optimistic
Compared to retail investors, Wall Street analysts are more cautiously optimistic about gold prices in 2025:
- Chantelle Schieven, Head of Research at Capitalight Research, views current consolidation as a healthy phase for the market. She forecasts gold prices to trade between $2,500 and $2,700 in the first half of 2025, with a potential breakout above $3,000 in the second half. She sees high inflation (holding above 3%) and geopolitical risks providing further support in 2025.
- Fawad Razaqzada, Market Analyst at City Index, also identifies challenges like a strong U.S. dollar, rising bond yields, and weaker Asian demand. However, he believes inflation and geopolitical tensions will help gold perform well in the second half, making the $3,000 target achievable. Early-year corrections or consolidations could lay the groundwork for a strong rally later.
- Nicky Shiels, Head of Research and Metals Strategy at MKS PAMP, forecasts gold prices will range between $2,500 and $3,200 in 2025, depending largely on Federal Reserve policy. Shiels cites inflation, deglobalization, currency debasement, and strong central bank demand as long-term supportive factors but warns investors that new policies may divert interest toward cryptocurrencies.
- Ewa Manthey, ING’s Commodities Strategist, remains optimistic about gold prices in 2025, predicting an average spot price of $2,800 in the first two quarters. However, she anticipates that a slow down in the Federal Reserve’s monetary easing could cause gold to gradually retreat to around $2,700 later in the year.
Key Factors Influencing Gold Prices in 2025
- Monetary Policy and Interest Rates
A major driver of gold’s rally in 2024 was expectations of central bank rate cuts. However, tighter monetary policies in early 2025 may initially weigh on gold prices. Over the longer term, declining interest rates are expected to support sustained growth in gold.
- Geopolitical Uncertainty
Policies under Donald Trump’s presidency, including potential trade tariffs, are likely to fuel risk aversion and drive demand for gold. Additionally, global economic fragmentation and de-dollarization trends could prompt more countries to see gold as a reserve asset.
- Inflation and Slowing Economic Growth
Slowing global economic growth and persistently high inflation create an ideal environment for gold. Analysts suggest that both falling real interest rates and inflationary pressures will provide long-term support for the precious metal.
- Strong Central Bank Demand
Despite elevated gold prices limiting some buying, central banks are expected to continue increasing reserves to mitigate sanctions risks and reduce reliance on the U.S. dollar. This strong demand is likely to sustain gold prices in 2025.
Conclusion: 2025 Outlook for the Gold Market
While headwinds from a strong U.S. dollar and rising bond yields may create short-term challenges, the gold market in 2025 demonstrates robust resilience and long-term potential. Retail investors remain confident that gold will surpass $3,000 per ounce, while Wall Street experts anticipate more cautious but sustained growth, particularly in the latter half of the year.
As global economic uncertainty intensifies, geopolitical tensions escalate, and central banks maintain strong demand, gold will likely continue to attract investors as a safe-haven asset. Investors should monitor real-time market conditions and adjust their portfolio allocation in gold to mitigate risks and capture profit opportunities.
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