Gold prices had a stellar 2024, racking up a 35% gain. Even a bull market in stocks couldn’t compete with that, as the S&P 500 rose 25% and the Dow settled for a 13% improvement.
Now, as we head into 2025, gold looks primed for another big year. The metal rang in the new year last week with a 1.5% gain. That took the price of gold to $2,657 an ounce — its highest level in nearly a month.
This shouldn’t come as a surprise. Gold prices began their bull run all the way back in 2022. The surge simply accelerated in 2024, and now the momentum is poised to carry prices even higher in 2025.
Wall Street is betting on it. UBS sees gold hitting $2,800 an ounce this year, while Citi and Goldman Sachs both believe the metal will break $3,000.
Take a quick glance at the investment landscape and you’ll see why.
The Forces Driving 2025 Gold Prices
There’s no shortage of bullish factors driving gold prices higher.
Lower interest rates, for example.
The Fed notched three consecutive interest rate cuts in 2024, and expects to follow through with at least two more in the weeks and months ahead. The FOMC had been planning even more aggressive action, but inflation has once again proven a hard beast to tame.
Consumer prices rose 2.7% in November, forcing the Fed to reconsider its 2025 forecast. Where the FOMC had previously expected to graze its 2% target this year, the committee now expects inflation will continue to hover around 2.5%. They don’t see inflation sinking to 2% until 2027.
That’s a best-case scenario, too. Because as I mentioned a few weeks ago, President Trump’s economic policies — namely tariffs and mass deportation — risk driving prices significantly higher.
Of course, it’s impossible right now to say exactly how those policies will be implemented and exactly what impact they will have. And that uncertainty only increases the appeal of precious metals as a safe haven
Not just for regular investors or Wall Street firms, either. Central banks around the world have been gobbling up gold to diversify their reserves, work around economic sanctions, hedge against the dollar’s decline, and safeguard their capital from geopolitical chaos and WWIII.
Central banks around the world bought a record 1,082 metric tons of gold in 2022 and another 1,037 metric tons of gold in 2023. We don’t yet have a full accounting of 2024’s purchases, but last year’s purchases are likely in line with those figures — if not another new record.
Again, the reasons vary, but some very clear themes have emerged. Generally speaking, there’s a fear that the global order that’s held since the end of WWII is collapsing and that the United States and the dollar are no longer a reliable tentpole for the global economy.
Indeed, America’s rivals have been slowly pivoting away from the dollar as a reserve currency for decades, almost trying to manifest its fall from grace.
Those efforts have been routinely undermined by the persistent strength and resilience of America’s economy and the continued absence of a true alternative. But there’s still no denying that we’re staggering as a superpower, and with wars running hot from Europe to the Middle East, the entire planet feels like it’s wobbling on its axis.
Those fears have not been subdued by drastic shifts in policy as America swerves between two increasingly distant and combative political parties.
And that brings us back to 2025, where President Trump has pledged a drastic overhaul of the U.S. government and, truly, American society as a whole. Thus, chaos will continue to reign and gold prices along with it.
Fight on,
Jason Simpkins
Simpkins is the founder and editor of Secret Stock Files, an investment service that focuses on companies with assets — tangible resources and products that can hold and appreciate in value. He covers mining companies, energy companies, defense contractors, dividend payers, commodities, staples, legacies and more...
In 2023 he joined The Wealth Advisory team as a defense market analyst where he reviews and recommends new military and government opportunities that come across his radar, especially those that spin-off healthy, growing income streams. For more on Jason, check out his editor's page.
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