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Khaleej Times
a day ago
- Business
- Khaleej Times
Gold eyes $3,900 as uncertainty fuels bullish surge
Already up nearly 30 per cent in 2025 after a 25 per cent gain in 2024, gold is not only outperforming equities but also establishing itself as the ultimate investment haven. In a world increasingly plagued by economic instability, geopolitical tension, and fiscal recklessness, the yellow metal is once again proving its mettle. The outlook, according to analysts and strategists, is upbeat: gold could surge to a record average of $3,210 this year, with the potential to test highs as lofty as $3,900. This bullish trajectory is anchored in an evolving macroeconomic landscape. The latest Gold Focus report by Metals Focus, released this week, forecasts a 35 per cent jump in the annual average gold price for 2025. 'Looking ahead, we expect gold to break new ground,' said Philip Newman, managing director at Metals Focus. "Macroeconomic uncertainty and elevated geopolitical risks are likely to sustain investor interest... We forecast a record average price of $3,210 - a level that would finally surpass the real terms peak from 1980.' Non-liability-bearing reserve asset Driving this momentum is a potent mix of factors. Central banks are hoarding gold at record levels - net official sector purchases in 2024 reached 1,086 tonnes, driven by a strategic move away from the US dollar. With trust in the greenback eroding due to swelling US debt, renewed trade tensions under President Trump, and fiscal uncertainty, global monetary authorities are turning to the yellow metal as a non-liability-bearing reserve asset. Analysts say that trend is set to continue well into 2025. Retail and institutional demand also remain firm, despite sky-high prices. While Western markets have seen a slowdown, investor appetite in South and East Asia has more than made up for the slack. Metals Focus notes that physical demand from private investors held up far better than expected, a sign that gold's value proposition remains intact even at elevated price levels. Still a financial fortress Investor anxiety over the direction of US trade and monetary policy has added fuel to gold's rise. Expectations of further interest rate cuts by the Federal Reserve later in 2025 have stoked enthusiasm for non-yielding assets like gold. At the same time, speculative positioning - while a source of volatility - has reinforced the upward trend as investors consistently 'buy the dips.' Precious metals analysts argue that with central banks accumulating at historic levels, investors hedging against currency volatility, and governments showing few signs of fiscal restraint, "gold's narrative as a financial fortress seems far from over. For now, the yellow metal shines brighter than ever—offering not just a hedge, but a haven." A new price floor Yet not all voices in the market are equally bullish. Quant Mutual Fund recently warned that gold may have peaked in the short term, suggesting a potential 12 to 15 per cent correction in dollar terms over the next two months. Still, the fund maintains a positive medium to long-term outlook and advises investors to maintain meaningful exposure to precious metals within diversified portfolios. For a more nuanced perspective, George Milling-Stanley, chief gold strategist at State Street Global Advisors and one of the most respected voices in the gold space, weighed in on the outlook during a recent interview. A pioneer in gold investing and a key architect behind SPDR Gold Shares (GLD), Milling-Stanley believes the rally has deeper roots. 'We still have a lot of geopolitical turbulence, and gold historically performs well during periods of geopolitical turmoil,' he said. 'We still don't know where we stand with interest rates. We still have enormous uncertainty on the macroeconomic front.' He emphasises that the metal's rise has not been driven primarily by inflation, contrary to popular belief, but by an overarching climate of unpredictability. Importantly, Milling-Stanley believes that gold has now established a new price floor. 'It looks very much as if we've established a new floor above $3,000 an ounce,' he explained. 'Last year, the floor was around $2,000. That is a huge leap.' With this new baseline, gold could consolidate in the $3,000 to $3,500 range before attempting to breach resistance levels near $3,900, he said. Indeed, this sentiment is echoed in the numbers. The three-year annualised return on gold, as tracked by GLD, now stands at 21.4 per cent -well above its long-term average of around 8 per cent since 1971. For nervous investors navigating today's volatile markets, the allure is not just performance, but protection. Bar and coin investment has stayed broadly flat globally, but regional shifts are notable. Strong demand in China and India has compensated for softness in the West. Meanwhile, ETFs and institutional vehicles continue to see steady inflows, signaling confidence in gold's long-term value. Gold's resilience has also found an unexpected ally in trade policy. The reintroduction of tariffs by the US administration and fears of a full-blown trade war have rattled global investors, further undermining confidence in traditional assets and currencies. As these pressures mount, gold's role as an insurance policy becomes ever more relevant. Even if gold consolidates in the coming months, strategists believe the outlook remains fundamentally strong. 'The higher the uncertainty, the higher the upper limit,' said Milling-Stanley. 'Our bullish case suggests we could actually take out whatever resistance is available at the $3,500 area, and possibly even trade as high as $3,900.'
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Business Standard
4 days ago
- Business
- Business Standard
Xi-Trump call signals thaw in tensions; gold dips 1%, silver at 13-yr high
Safe-haven gold reversed course to fall nearly 1 per cent on Thursday after U.S. President Donald Trump and Chinese leader Xi Jinping agreed to further talks to settle trade disputes, while silver breached the key $35 level to reach a 13-year high. Spot gold fell 0.9 per cent to $3,347.79 an ounce, as of 12:12 p.m. EDT (1612 GMT) after trading 0.6 per cent higher earlier. U.S. gold futures were down 0.8 per cent at $3,371.60. Trump said on social media that the talks focused primarily on trade led to "a very positive conclusion." According to a Chinese government summary, Xi told Trump to back down from trade measures and warned him against threatening steps on Taiwan. "Trump will have a positive spin on the call with President Xi, therefore decreasing the imminent decoupling risks from China and the U.S., which have ultimately been one of the factors driving inflows into precious metals," said Daniel Ghali, commodity strategist at TD Securities. Gold, a safe-haven asset during times of political and economic uncertainty, has gained about 28 per cent so far this year. Central banks worldwide are set to buy 1,000 metric tons of gold in 2025, marking a fourth straight year of massive purchases as they shift reserves away from dollar assets, Metals Focus said. Meanwhile, data showed weekly jobless claims increased for a second straight week. All eyes now turn to Friday's nonfarm payrolls report. Trump on Wednesday renewed calls for Federal Reserve Chair Jerome Powell to cut rates. "I think that a weakening in the U.S. labor market will increase bets on a dovish Fed, (which) would be positive for gold," said Ricardo Evangelista, senior analyst at brokerage firm ActivTrades. Zero-yield bullion tends to thrive in a low interest-rate environment. Meanwhile, spot silver jumped 1.4 per cent to $35.45, after hitting its highest level since February 2012 earlier. The gold-silver ratio was currently at 94, down from 105 in April. "Extreme volatility may be back here as silver can really gallop, both ways," said Tai Wong, an independent metals trader. Platinum rose 4.8 per cent to $1,137.10, its highest level since March 2022, and palladium rose 0.6 per cent at $1,006.21.
Wall Street Journal
4 days ago
- Business
- Wall Street Journal
Gold Could Hit New High Later This Year, Report Says
Gold is likely to hit a new all-time high later this year on U.S.-policy driven economic uncertainty, geopolitical tensions and robust central-bank demand, according to a new report. The yellow metal's average annual price is forecast to rise 35% to $3,210 a troy ounce in 2025, the report by precious-metals consultancy Metals Focus said.
Reuters
4 days ago
- Business
- Reuters
Central banks on track for 4th year of massive gold purchases, Metals Focus says
LONDON, June 5 (Reuters) - Central banks worldwide are on track to buy 1,000 metric tons of gold in 2025, which would be their fourth year of massive purchases as they diversify reserves from dollar-denominated assets into bullion, consultancy Metals Focus said. Gold prices are up 29% so far this year after hitting a record high of $3,500 per troy ounce in April on geopolitical tensions and economic uncertainty as U.S. President Donald Trump continues to roll out his tariff policies. The price rally has so far kept purchases by central banks, a crucial category of demand, unaffected with the first-quarter buying in line with the 2022-24 quarterly average, Metals Focus said in its annual report on Thursday. "The drivers that have underpinned de-dollarisation in recent years remain firmly in place," the consultancy said. "If anything, President Trump's unpredictable policy stance, his public criticism of (Fed chair) Jerome Powell and the deteriorating U.S. fiscal outlook have further eroded confidence in the U.S. dollar and Treasuries as ultimate safe-haven assets." "Elevated geopolitical tensions since the start of his administration have also curtailed the appeal of U.S. assets." Accounting for almost one fourth of total demand, central banks are the third largest category of gold consumption after the jewellery sector and physical investment. In 2025, purchases from central banks are expected to fall by 8% from last year's record high of 1,086 tons. In January-March, Poland, Azerbaijan, and China - consistent buyers in recent years - led the officially reported buying, Metals Focus said, adding that steady inflows into Iran also suggest further purchases by the Central Bank of Iran. Meanwhile, jewellery demand for bullion has been hit hard by the price rally. Gold jewellery fabrication fell 9% to 2,011 tons in 2024 and is expected to deliver a 16% slump this year with India and China accounting for much of this decline. The consultancy expects average gold prices to rise by 35% this year after 23% growth in 2024, and reach $3,210 per ounce "with further strength likely into 2026". Following are Metals Focus's gold supply and demand numbers, in metric tons:
Yahoo
4 days ago
- Business
- Yahoo
Central banks on track for 4th year of massive gold purchases, Metals Focus says
By Polina Devitt LONDON (Reuters) - Central banks worldwide are on track to buy 1,000 metric tons of gold in 2025, which would be their fourth year of massive purchases as they diversify reserves from dollar-denominated assets into bullion, consultancy Metals Focus said. Gold prices are up 29% so far this year after hitting a record high of $3,500 per troy ounce in April on geopolitical tensions and economic uncertainty as U.S. President Donald Trump continues to roll out his tariff policies. The price rally has so far kept purchases by central banks, a crucial category of demand, unaffected with the first-quarter buying in line with the 2022-24 quarterly average, Metals Focus said in its annual report on Thursday. "The drivers that have underpinned de-dollarisation in recent years remain firmly in place," the consultancy said. "If anything, President Trump's unpredictable policy stance, his public criticism of (Fed chair) Jerome Powell and the deteriorating U.S. fiscal outlook have further eroded confidence in the U.S. dollar and Treasuries as ultimate safe-haven assets." "Elevated geopolitical tensions since the start of his administration have also curtailed the appeal of U.S. assets." Accounting for almost one fourth of total demand, central banks are the third largest category of gold consumption after the jewellery sector and physical investment. In 2025, purchases from central banks are expected to fall by 8% from last year's record high of 1,086 tons. In January-March, Poland, Azerbaijan, and China - consistent buyers in recent years - led the officially reported buying, Metals Focus said, adding that steady inflows into Iran also suggest further purchases by the Central Bank of Iran. Meanwhile, jewellery demand for bullion has been hit hard by the price rally. Gold jewellery fabrication fell 9% to 2,011 tons in 2024 and is expected to deliver a 16% slump this year with India and China accounting for much of this decline. The consultancy expects average gold prices to rise by 35% this year after 23% growth in 2024, and reach $3,210 per ounce "with further strength likely into 2026". Following are Metals Focus's gold supply and demand numbers, in metric tons: 2023 2024 2025F Change Change 24/23 25/24 SUPPLY Mine production 3,640 3,661 3,694 1% 1% Old scrap 1,234 1,368 1,368 11% 0% Net hedging supply 69 - 25 Total supply 4,943 5,029 5,087 2% 1% DEMAND Jewellery fabrication 2,206 2,011 1,696 -9% -16% Industrial demand 305 326 332 7% 2% Net physical investment 1,207 1,191 1,218 -1% 2% Net hedging demand - 55 - Net central bank buying 1,051 1,086 1,000 3% -8% Total demand 4,769 4,669 4,246 -2% -9% Market balance 175 359 840 106% 134% Net investment in ETPs -244 -7 500 Market balance less ETPs 419 366 340 -13% -7% Gold price ($/oz) 1,941 2,386 3,210 23% 35% Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
