Gold Prices Expected to Rise by 8% in 2025

Goldman Sachs predicts that gold prices will rise by another 8% in 2025, reaching around $3,100 per ounce by the end of the year. This would add to the already strong rally of over 40% since January 2024. The surge is mainly due to increasing gold purchases by central banks, which began stockpiling gold more aggressively after Russia’s central bank assets were frozen in 2022.

Key Factors Driving Gold Prices:

  1. Central Bank Buying:
    Central banks have been buying gold at a record pace to protect themselves from geopolitical risks and financial instability. This strong demand is providing long-term support to gold prices.

  2. Lower Interest Rates:
    Falling interest rates make gold more attractive because it doesn’t generate interest. As the Federal Reserve and other central banks ease monetary policy, holding gold becomes more appealing to investors.

  3. Geopolitical Uncertainty:
    Global tensions and economic instability are driving investors toward safe-haven assets like gold. This “flight to safety” increases demand and pushes prices higher.

Price Forecast Scenarios:

  • Base Case: Goldman Sachs expects gold to reach around $3,100 per ounce by the end of 2025 if central bank buying and lower rates continue.

  • Bullish Case: If market uncertainty increases or geopolitical tensions escalate, gold prices could surge to as high as $3,300 per ounce.

  • Bearish Case: If the Federal Reserve cuts interest rates fewer times than expected, gold prices may settle lower at around $3,060 per ounce.

Market Impact:

Gold’s upward trend reflects growing market confidence in gold as a long-term investment. With inflation pressures, currency fluctuations, and geopolitical risks still present, investors are increasingly turning to gold as a hedge against uncertainty. This trend is expected to keep supporting gold prices through 2025 and beyond.