empty
02.01.2025 08:05 AM
Gold Surprised Everyone. Will It Continue the Momentum?

A long way off! Following gold's impressive performance in 2024, banks and investment firms are predicting further rallies in 2025. Citi notes that in five of the last six years, when the precious metal gained over 20% in the preceding year, its average performance the following year was 15%. Experts at the Financial Times provide a consensus forecast of +7%. But how will it actually play out?

The year 2024 was remarkable for gold—not just for achieving its best performance since 2010 or for one of the largest annual gains in history. It wasn't only about reaching 40 record highs and a peak increase of +30%, marking the best trajectory since 1978. It wasn't solely due to gold's final gain of +27%, which outperformed the S&P 500 and most other commodity market assets. What truly stands out is that these successes were achieved under unfavorable conditions: the US dollar strengthened, and Treasury yields soared.

Gold and Other Commodity Market Performance

This image is no longer relevant

In 2023, a similar situation occurred when the Federal Reserve raised interest rates at the most aggressive pace seen in 40 years. Despite this, the USD index increased steadily, along with the yields on US debt, yet gold prices still managed to rise. Historically, a stronger US dollar and higher bond yields have presented significant challenges for XAU/USD bulls. Could this indicate a paradigm shift in financial markets?

It's no surprise that banks and investment firms are providing moderately optimistic forecasts for gold prices in 2025. The Financial Times consensus predicts a 7% increase. Goldman Sachs is the most bullish among analysts, forecasting that prices could reach $3,000 per ounce. Conversely, Barclays and Macquarie project declines to $2,500. Macquarie suggests that although the precious metal faces challenges from a stronger dollar, demand from consumers and central banks will help prevent a more significant drop.

XAU/USD bulls are hopeful for lower interest rates, geopolitical factors, and central bank purchases. Even as the pace of monetary policy easing slows, the Fed is still expected to lower borrowing costs further. This shift could redirect part of the $6.7 trillion capital in money market funds into gold-oriented ETFs.

This image is no longer relevant

Gold reached an all-time high before experiencing a sharp decline in November, driven by the "buy the rumor, sell the fact" principle. XAU/USD bulls remained cautious about Donald Trump's potential return to power in the U.S. Once his return became a reality, many began to lock in their profits. Nevertheless, uncertainty persists, and Trump's policies are expected to heighten volatility in financial markets, which could continue to support gold prices.

From a technical perspective, the daily chart for gold illustrates the ongoing formation of a "Spike and Ledge" pattern. A rebound from the fair value of $2,645 per ounce might provide a basis for establishing or adding to short positions. Conversely, a breakout above this level would indicate potential opportunities for further purchases.

Marek Petkovich,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

USD/JPY – Analysis and Forecast

The Japanese yen is showing strong gains amid broad-based selling of the U.S. dollar, keeping the USD/JPY pair below the key psychological level of 147.00. Investor concerns over the potential

Irina Yanina 18:22 2025-04-03 UTC+2

Markets enter warpath

Donald Trump confidently speaks about America's return to its Golden Age. From his viewpoint, it's time for America to prosper, rather than other countries. However, why does the US president

Marek Petkovich 10:49 2025-04-03 UTC+2

Why Is the Dollar Falling If Tariff Issues Affect Everyone? (Correction Likely for GBP/USD and EUR/USD After Sharp Rally)

The U.S. dollar had recently managed to stay above the key 104.00 mark on the ICE index, giving hope that a further decline might be avoided

Pati Gani 09:12 2025-04-03 UTC+2

What to Pay Attention to on April 3? A Breakdown of Fundamental Events for Beginners

On Thursday, several macroeconomic events are scheduled, with the U.S. ISM Services PMI being the most significant. At this moment, we believe there is little value in analyzing the macroeconomic

Paolo Greco 07:26 2025-04-03 UTC+2

GBP/USD Pair Overview – April 3. The Market is Tired of Trump's Tariffs

The GBP/USD currency pair continued to trade in a total flat on April 2. What caused the dollar to stop falling? After all, Trump announces new tariffs or teases upcoming

Paolo Greco 06:10 2025-04-03 UTC+2

EUR/USD Pair Overview – April 3. Trump's Tariffs: Not As Simple As It Seems

The EUR/USD currency pair once again spent most of Wednesday virtually motionless. Even in the chart below, it's clear that recent volatility is low and decreasing. Strangely enough, this

Paolo Greco 06:10 2025-04-03 UTC+2

GBP/USD: Optimism from the British Minister and the Risk of Long Positions

The GBP/USD pair is holding firm ahead of Trump's expected tariff announcement. On Tuesday, the pound reached a weekly low of 1.2878, only to sharply reverse and return to 1.29

Irina Manzenko 01:06 2025-04-03 UTC+2

XAU/USD. Analysis and Forecast

Gold continues to rise as investors remain concerned about U.S. President Donald Trump's aggressive trade policy and its impact on the global economy. In addition, ongoing geopolitical tensions serve

Irina Yanina 13:22 2025-04-02 UTC+2

AUD/USD: Analysis and Forecast

Today, the AUD/USD pair is showing positive momentum, rebounding from nearly a four-week low. Support has come from the Reserve Bank of Australia's less "dovish" stance, with the central bank

Irina Yanina 12:25 2025-04-02 UTC+2

Markets May React to New U.S. Tariffs with Growth—But Under One Condition... (GBP/USD Downside and USD/CAD Upside Possible)

The day Donald Trump declared "Liberation Day" has arrived. Markets are bracing for the U.S. to introduce comprehensive and large-scale tariffs on its trade partners and potential retaliatory measures from

Pati Gani 09:51 2025-04-02 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.