Gold set to extend record rally into 2025 amid rate cuts, dollar weakness: Heraeus
Gold’s remarkable run is expected to continue into 2025, driven by further interest rate cuts from major central banks and a likely weaker dollar, Heraeus Precious Metals said on Tuesday.
The precious metals firm forecasts gold prices will range between $2,450 and $2,950 per ounce in 2025, bolstered by central bank purchases, geopolitical risks in Ukraine and the Middle East, and persistent demand as a safe-haven asset. Although central bank gold buying is anticipated to decline slightly compared to 2024, the trend remains a key factor in gold’s sustained momentum.
Gold, traditionally seen as a store of value during times of political and economic uncertainty, benefits from lower interest rates, which reduce the opportunity cost of holding the non-yielding asset. “If the Chinese government’s economic stimulus measures boost the economy, China and India could provide a solid basis for gold demand in 2025,” Heraeus report read.
China’s central bank resumed gold purchases in November after a six-month pause, according to the People’s Bank of China (PBC). Additionally, Heraeus pointed to the potential return of Donald Trump as US president, suggesting it could heighten trade and tariff uncertainties, further supporting gold prices.
Other Precious Metals Outlook
Heraeus projects strong industrial demand for silver, driven by the growth of solar photovoltaic applications. With the gold-silver ratio indicating silver’s undervaluation, the metal is expected to outperform gold in the late stages of the bull market, with prices forecasted between $28 and $40 per ounce.
The platinum market is expected to remain in deficit through 2025, as rising demand from the automotive and industrial sectors offsets supply increases. Prices are projected to range from $850 to $1,220 per ounce.
Conversely, palladium demand could face a decline as electric vehicles gain market share at the expense of internal combustion engines, which heavily rely on the metal. Heraeus anticipates palladium prices to range between $800 and $1,200 per ounce.
Gold has surged over 29 per cent this year, on track for its best annual performance since 2010, fueled by central bank rate cuts and escalating geopolitical tensions. As 2025 approaches, gold’s role as a safe haven is likely to remain pivotal in navigating global economic uncertainties.
Attribution: Reuters
