Accumulation phase will maintain gold's upward momentum
After several breakout sessions, the world gold price is showing signs of cooling down. Chantelle Schieven - Head of Research at Capitalight Research - told Kitco News that the current accumulation phase of gold is necessary for the market to maintain a sustainable upward momentum.
“I’m not at all concerned about the volatility we’re seeing. I think this lull is healthy for the market,” she said.
After gold surpassed $2,400 an ounce in 2024 — far exceeding initial forecasts — the precious metal still has plenty of room to rise in 2025, according to Schieven. She expects gold prices to fluctuate between $2,500 and $2,700 an ounce in the first half of the year before surpassing $3,000 an ounce in the second half.
“I remain as bullish on gold in 2025 as I was on 2024,” she said, acknowledging that the current accumulation phase could last for several months.
Still facing many challenges
Despite the bullish factors, gold prices also face significant challenges in 2025. Fawad Razaqzada - Market Analyst at City Index - commented that the strong US dollar and high bond yields will continue to put pressure on gold in the first half of the year.
“Monetary policy is likely to remain tight into early 2025, which could support the US dollar and bond yields, reducing the appeal of gold,” he said.
Razaqzada also said that gold demand from China and India - the world's two largest gold consuming markets - are facing domestic difficulties, putting negative pressure on the price of this precious metal.
However, in the long term, Razaqzada is optimistic that gold will maintain its appeal as a store of value. “Inflation continues to erode the purchasing power of fiat currencies, strengthening gold’s position,” he said. “Furthermore, geopolitical tensions continue to fuel safe-haven demand.”
With macro factors at play, the big question investors are asking is whether gold prices can surpass $3,000/ounce in 2025.
Long-term forecasts and dynamics
Fawad Razaqzada said gold prices still have the potential to reach $3,000 an ounce in his forecast. Despite a strong dollar and slowing demand from China and India, geopolitical factors and high inflation still ensure a long-term rally.
Meanwhile, Nicky Shiels - Head of Metals Strategy at MKS PAMP - commented that gold prices could fluctuate within the range of 2,500 - 3,200 USD/ounce in 2025. According to her, the monetary policies of the US Federal Reserve (FED) will be the deciding factor in this asset trend.
Ewa Manthey from ING forecasts that the average gold price in 2025 will fluctuate around $2,750 - $2,800/ounce, in line with the context of deflation and increased demand in the national foreign exchange reserve area.
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