World gold prices are likely to reach unprecedented highs in early 2025, according to the CEO of deVere Group, one of the world's leading independent financial consulting and asset management companies.
Nigel Green of deVere Group said that this precious metal is preparing for a price increase that could break previous records.
According to The Indian Express, this optimistic outlook for Nigel Green is driven by three main factors affecting the global market.
Increased purchases by central banks
Global central banks are increasing gold purchases at an unprecedented pace, a trend that began after the Russia-Ukraine conflict and has expanded as countries shifted away from USD-denominated assets.
Gold purchases have now skyrocketed to nearly three times their pre-2022 levels and the outlook shows continued strong demand in 2025, Green said.
According to Green, this buying wave is not only about portfolio diversification but also a strategic move to reduce risks. Countries, especially those wary of US financial sanctions, are increasingly turning to gold to protect their reserves from political and economic pressure.
Citing China as an example, Green said: In 2023, the Chinese central bank increased its gold holdings for 10 consecutive months. This buying intensity continues into 2024, with net purchases of 290 tons recorded in the first quarter of 2024 - the fourth strongest quarter since the buying chain began in 2022.
Countries such as Turkey, Singapore, Brazil and India are also increasing their gold reserves to protect against currency fluctuations and potential sanctions.
Fed cuts interest rates The US Federal Reserve's shift from a strong interest rate hike to a possible cut is another important factor that could push gold prices higher.
Higher interest rates make gold less attractive because gold does not make a profit, Green said. However, as interest rates are set to fall, the picture is changing. Lower interest rates can typically reduce the appeal of profitable assets, drawing some investors both retail and institutional back into the gold market.
Geopolitical tensions
In the current fragile global context, golds role as a hedge remains important as the risk of geopolitical shocks including trade war, sanctions and rising global tensions remains significant, Green said.
One scenario that could see gold prices soar, according to Green, is an escalation of financial sanctions equivalent to the increase seen since 2021. Another potential factor could be worsening debt concerns in the US.
In this context, and if the current rally is maintained, we could see a new record high in gold prices in the first quarter of 2025, he said.
Some industry experts also said that gold prices in 2024 could reach $3,000/ounce, but the possibility is higher in early 2025.
Steven Kibbel, a certified financial planner and senior editor at InternationalMoneyTransfer.com, predicts gold could reach $3,000/ounce by early 2025 and $2,800 in 2024.
