Gold could extend its record run into 2025 as further interest rate cuts from major central banks and the prospect of a weaker dollar will boost demand for the safe-haven asset, Heraeus Precious Metals said on Tuesday.
Heraeus expects gold prices to range from $2,450 to $2,950 per ounce in 2025, influenced by continued buying by major central banks, albeit in lesser quantities than in 2024, geopolitical risks in Ukraine and the Middle East.
Gold, often used as a safe store of value during times of political and financial uncertainty, tends to appreciate on expectations of lower interest rates, which reduce the opportunity cost of holding the non-yielding asset.
"If the Chinese government's economic stimulus measures boost the economy, China and India could provide a solid basis for gold demand in 2025," the company said in a report.
"With the return of Donald Trump as U.S. president, there is likely to be more uncertainty regarding trade and tariffs, which should also support the gold price," said Steffen Metzger and Stefan Staubach, who have been leading the precious metals division of Heraeus.
Gold has surged more than 29% this year and is on track for its best annual performance since 2010, driven by central bank interest rate cuts and growing geopolitical tensions.
Heraeus further noted that industrial demand for silver is expected to surge, propelled by the continued growth in solar photovoltaic demand.
The current gold-silver ratio indicates silver's undervaluation compared to gold, suggesting that silver may outperform gold in late bull markets, with expected prices between $28 and $40 an ounce, the report said.
The platinum market is projected to remain in a deficit in 2025, the report said. Despite rising demand from the automotive and industrial sectors, Heraeus anticipates that platinum prices will remain within the $850 to $1,220 per ounce range.
However, the report underscores that demand for palladium, which is heavily dependent on the automotive industry, might decline as internal combustion engines lose market share to electric vehicles.
This shift could exert downward pressure on palladium prices, with Heraeus projecting a price range of $800 to $1,200 per ounce.
