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Gold will hold its own in 2025, spot price to top out at $2,700/oz – TD Securities
Gold prices may see a near-term correction as investors reduce their long positions, but persistent inflation and geopolitical instability will ensure that the yellow metal will not see a rout in 2025, according to commodities strategists at TD Securities.
In their 2025 Commodities Outlook, TD Securities analysts said that while the Fed’s cutting cycle, geopolitical uncertainties, and strong central bank buying propelled gold to record highs this year, fund flows were less supportive.
“There are no shortages of compelling macro narratives that have chased the melt-up in gold over the months heading into US elections,” the analysts wrote. “Unfortunately, many of these narratives have not been factually supported by sustained flows: Macro funds have been 'max long' since August — this claim has since been corroborated by the COT report remaining largely unchanged since; Shanghai traders have sold nearly 35t of notional gold over the last weeks in response to an improving opportunity-set for domestic capital; buying activity was only observably recorded in marginal traditional and Chinese ETFs inflows; there were nearly no money manager directional shorts remaining; and the rise in USD and US rates do not bode well for Western flows in the near-term.”
They noted that fund flows were actually weak heading into the Nov. 5 election in the United States, even as SGE gold withdrawals were at their lowest levels since 2020. Read More
China will maintain a firm grip on the gold market in 2025 - Capital Economics
China played a pivotal role in the gold market in 2024 as consumer demand and central bank purchases drove prices to record highs in the first half of the year.
A slowdown in the second half of the year, as the People’s Bank of China paused purchases for six months and a sharp drop in gold imports occurred, hasn’t derailed the nation’s influence in the precious metals market.
Looking ahead to the new year, one research firm expects Chinese gold demand to remain strong through 2025, providing critical support for prices. Hamad Hussain, Assistant Climate and Commodities Economist at Capital Economics, said that soft economic activity and a weak renminbi will drive gold demand in China next year.
“We think that the slow-motion collapse of China’s property sector will be a major headwind to economic growth and boost safe-haven demand for gold,” he said in a recent research note. “Moreover, a worsening of the property crisis would also boost the relative attractiveness of gold as an investment vis-à-vis other assets.”
Hussain added that for Chinese consumers, “all roads lead to gold.” Read More
Strong U.S. dollar and high yields weaken gold fundamentals, but price still has a path to $3,000/oz in 2025 – City Index’s Razaqzada
While U.S. dollar strength, higher bond yields, equity outperformance and weaker Asian demand will work against gold in the year to come, a number of factors still support the yellow metal’s journey to $3,000 per ounce in 2025, according to Fawad Razaqzada, Market Analyst at City Index.
In their 2025 Gold Fundamental Outlook Preview, Razaqzada wrote that a key driver of the 2024 gold rally was the expectation that central banks would lower interest rates as inflation fell.
“While rate cuts materialised, their impact on gold was moderated by lingering inflation concerns,” he said. “In December, the Federal Reserve enacted an expected rate cut but caused a bit of volatility as it signalled caution for the year ahead due to persistent inflation risks, driven partly by expected US policy shifts, including tax cuts and tariffs under the Trump’s presidency. Similarly, the European Central Bank and Bank of England adopted a cautious approach, citing strong wage growth and inflationary stickiness.”
“As a result, monetary policy is likely to remain tight in early 2025, potentially supporting bond yields and the US dollar— two factors that often work against gold’s appeal,” Razaqzada added. Read More
2025 U.S. dollar index preview: More upside likely
The U.S. dollar index is a basket of six major world currencies weighted against the greenback. The USDX is an important “outside market” that has a near-daily price influence on other markets, including the precious metals. The USDX is also a good barometer of the health of the U.S. economy, which is the largest in the world.
The USDX recently hit a two-year high and is trending higher on the charts. In fact, the monthly chart for the USDX shows prices have been in an uptrend since 2008. It’s important to note that trends in the currency markets tend to be stronger and longer-lasting than price trends in other markets. While the uptrend in the USDX is a mature one, at 16 years old, there are no strong, early technical clues to suggest the index will put in a major market top any time soon.
A Federal Reserve that has very likely become more tentative on further cutting U.S. interest rates in the coming new year will also work in favor of the USDX bulls.
The U.S. economy may have its problems in 2025, including the prospects of stubborn price inflation and/or headwinds from any new trade tariffs initiated by the incoming Trump presidential administration. However, it’s likely the U.S. currency will remain “the cleanest dirty shirt in the drawer” of other major currencies. The U.S. dollar also still holds the title of the safest currency in the world, so any new geopolitical unrest would also likely support the USDX. Read More
Gold prices to tread water in final trading week of 2024
Low holiday trading volume in the final week of 2024 is expected to keep gold prices contained within their narrow range, according to some market analysts.
Markets will be closed mid-week on Jan. 1, so many analysts remain focused on celebrating the New Year rather than monitoring financial markets.
Barring any major surprises on the horizon, many analysts predict that gold prices will remain caught in a tug-of-war between rising bond yields and safe-haven demand driven by increasing geopolitical and economic uncertainty.
This past week, gold prices were capped at $2,650 an ounce; however, the market was able to withstand significant headwinds as the yield on 10-year Treasury notes rallied to 4.64%, its highest level in seven months.
The precious metal remains range-bound heading into the weekend, even as bond yields stay elevated above 4.6%. Spot gold futures last traded at $2,618.30 an ounce, down 0.57% on the day. Meanwhile, gold prices are down 0.18% for the week.
“Gold’s resilience this week has been underpinned by escalating geopolitical tensions. Investors are closely monitoring conflicts in Eastern Europe and the Middle East,” said James Hyerczyk, market analyst at FX Empire, in a note Friday. “Israeli strikes against Houthi targets in Yemen and Russian drone attacks in Ukraine have reinforced gold’s appeal as a safe-haven asset. This geopolitical backdrop continues to keep gold in play, with traders hedging against the risk of further flare-ups.” Read More
Silver will weather industrial demand dip next year, could still outperform gold in the second half of 2025
While it may have started its rally a little later than gold did this year, silver ultimately proved to be the best performer in the entire commodities complex this year. Looking ahead, many analysts and investment banks believe that despite a likely hit to industrial demand, particularly in the early months of the year, the gray metal could outperform gold once again in 2025.
Commodities strategists at TD Securities wrote in their 2025 outlook that the strengthening economies of the United States and China in the second half of 2025 will stimulate demand and tighten the undersupplied silver market, with excess inventories getting absorbed over the coming year.
“The white metal may get squeezed, as recovering Asian demand absorbs recent inventory builds in the aftermath of the Chinese slowdown and the base metal concentrate processing capacity increases,” they wrote. “We project the metal to average $36/oz in the final months of next year, making it a commodity outperformer as the XAU/XAG ratio challenges yearly lows.”
The analysts added that “the #silversqueeze you can buy into was the most exciting trade across the entire commodities complex” in 2024, but they still see massive growth potential for the precious metal during the year to come.
“Make no mistake, silver's rally over the course of the last year has overwhelmingly been tied to gold's, but we note an explosive convexity in the set-up which points to a legitimate case for the erosion and eventual depletion of free-floating inventories on the horizon,” they said. Read More
Gold prices struggling as U.S. pending home sales rise 2.2% in November
The gold market is struggling to hold support at $2,600 an ounce and could face increased selling pressure as the U.S. housing market shows further signs of stabilizing as more consumers start the process of buying a new home, according to the latest data from the National Association of Realtors (NAR).
The U.S. pending home sales index rose 2.2% in November, the NAR announced on Monday, after October’s 1.8% increase. The data was significantly better than forecasts, as economists expected a 0.9% increase. According to the report, contract signings grew in all four U.S. regions in the last 12 months, with the West showing the biggest jump.
For the year, pending home sales are up 6.9%.
The gold market is not seeing a significant reaction to the latest economic data; however, according to some analysts, it could add to the selling pressure as the market struggles on its back foot near a critical support level. Spot gold last traded at $2,605.70 an ounce, down 0.56% on the day.
The rise in transactions comes as mortgage rates remain fairly elevated. However, NAR Chief Economist Lawrence Yun said that potential buyers are now getting comfortable with the market. Read More
Gold, silver sell off on firmer USDX, technical pressure
Gold and silver prices are solidly down in midday U.S. trading Monday. A rally in the U.S. dollar index is a bearish daily “outside-market” element for the precious metals. Technical-based selling from the shorter-term futures traders is also featured today, amid a lack of fresh, bullish fundamental news recently. Look for a quieter trading day Tuesday, what with the New Year holiday coming on Wednesday when most markets worldwide are closed. February gold was last down $18.60 at $2,613.20 and March silver was down $0.558 at $29.41.
The key outside markets today see the U.S. dollar index higher. Bloomberg reports “the dollar is headed for its best year in almost a decade as U.S. economic strength reins in expectations for the Federal Reserve’s rate-cutting cycle, and Trump’s threats of harsh tariffs underpin bullish bets on the currency.” Meantime, Nymex crude oil futures prices are firmer and trading around $71.25 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.553%.
Technically, February gold futures bulls and bears are on a level overall near-term technical playing field amid recent choppy trading. Bulls’ next upside price objective is to produce a close above solid resistance at $2,700.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the November low of $2,565.00. First resistance is seen at today’s high of $2,640.70 and then at last week’s high of $2,655.70. First support is seen at today’s low of $2,608.40 and then at $2,600.00. Wyckoff's Market Rating: 5.0.
Image Source: Kitco News
March silver futures bears have the overall near-term technical advantage. A nine-week-old downtrend is in place on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $31.00. The next downside price objective for the bears is closing prices below solid support at the August low of $27.39. First resistance is seen at $30.00 and then at last week’s high of $30.485. Next support is seen at the December low of $29.145 and then at $29.00. Wyckoff's Market Rating: 3.0. Read More
Image Source: Kitco News
Will gold deliver a standout start to 2025, or will the decade-long seasonal trend fail in January? – ForexLive’s Low
Gold prices historically enjoy their best month of the year in January, but this new year brings a number of factors that make the yellow metal’s performance harder to handicap, according to Justin Low, currency analyst at ForexLive.
Low said that while gold still has seasonal support, the strong rally in 2024 and the Federal Reserve’s changing rate outlook make next month different.
“It's a bit of a tricky one this time around with gold prices rising by over 27% already in 2024,” he wrote. “Things have cooled off in November and December so far but that arguably owes much to the US election result, which in turn has also impacted the Fed outlook somewhat for next year. A surging dollar has helped to keep things in check, for now at least.”
“With gold poised to snap its December hot streak (there is still time to recover that, of course), is January - typically gold's best performing month - also under threat?” he asked.
Low said that over the past ten years, January has proven to be the best month of the year for gold. “However, that hasn't quite been the case in the post-pandemic era,” he noted. “One can argue that in part, there is some frontrunning in the buying in December. But, is it perhaps due to China also struggling during this period? After all, there is always the thought of that gold rush coming through ahead of the Lunar New Year celebrations.” Read More
Capitalight’s Schieven is as bullish on gold in 2025 as she was in 2024
The gold market may be preparing to end the year on a soft note, on pace to close out December with a loss for the first time in seven years. However, there is still a significant amount of optimism in the marketplace ahead of the new year.
In a recent interview with Kitco News, Chantele Schieven, Head of Research at Capitalight Research, said that despite the current weakness in the market, gold continues to hold its own in a difficult environment. She noted that gold’s selloff since its October highs and the ensuing consolidation is the first major correction the precious metal has seen all year.
“I am not at all concerned with the volatility we are seeing,” she said. “I think this breather is healthy for the market.”
Schieven added that even with this disappointing price action heading into the new year, investors should not forget what was accomplished in 2024.
The precious metal saw an unprecedented run, hitting record highs roughly 40 times this year. At its peak in October, gold was up more than 30% for the year, marking its best performance since 1979.
At the start of 2024, Schieven was the most bullish analyst among those surveyed by the London Bullion Market Association in its annual forecast. She predicted that gold would hit $2,400 an ounce this year, a level it surpassed by nearly $400. Looking ahead, Schieven said she thinks gold still has a lot more room to run.
“I am still as bullish on gold for 2025 as I was for 2024,” she said. Read More
Disclaimer: These articles are provided for informational purposes only. They are not offered or intended to be used as legal, tax, investment, financial, or any other advice.
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