Global gold prices are likely to hit an all-time high as early as 2025, according to the CEO of deVere Group, one of the world's leading independent financial advisory and asset management firms.
The precious metal is poised for a rally that could shatter previous records, said Nigel Green of deVere Group.
According to The Indian Express, Nigel Green's optimistic outlook is driven by three key factors affecting global markets.
Central bank buying surges
Global central banks are buying gold at an unprecedented pace, a trend that began after the Russia-Ukraine conflict and has expanded as countries shift away from dollar-denominated assets.
“Gold purchases have now surged to almost three times their pre-2022 levels and the outlook suggests continued strong demand into 2025,” Green said.
According to Green, this buying wave is not just about portfolio diversification but also a strategic move to reduce risk. Countries, especially those wary of US financial sanctions, are increasingly turning to gold to protect their reserves from political and economic pressure.
Taking China as an example, Green said: “In 2023, the Chinese central bank increased its gold holdings for 10 consecutive months. This buying intensity continued into 2024, with net purchases of 290 tonnes recorded in the first quarter of 2024 – the fourth strongest quarter since the buying streak began in 2022.”
Countries such as Türkiye, Singapore, Brazil and India are also increasing their gold reserves to protect against currency fluctuations and potential sanctions.
Fed Rate Cut The US Federal Reserve's move from aggressive rate hikes to potential rate cuts is another important factor that could push gold prices higher.
“Higher interest rates make gold less attractive because it does not generate a yield. However, as interest rates are set to fall, the situation is changing. Lower interest rates can often reduce the appeal of yield-yielding assets, attracting some investors – both retail and institutional – back into the gold market,” Green said.
Geopolitical tensions
In the current fragile global environment, gold's role as a hedge remains important as the risk of geopolitical shocks - including trade wars, sanctions and rising global tensions - remains significant, Green said.
One scenario that could send gold prices soaring, according to Mr. Green, is an escalation of financial sanctions similar to the increase seen since 2021. Another potential trigger could be worsening debt concerns in the US.
“In this context, and if the current bullish momentum is maintained, we could see new record high gold prices in the first quarter of 2025,” he said.
Some industry experts also said that gold prices could reach $3,000 an ounce in 2024, but the possibility is higher in early 2025.
Steven Kibbel, a certified financial planner and senior editor at InternationalMoneyTransfer.com, predicts gold prices could reach $3,000 an ounce by early 2025 and $2,800 by 2024.
