Category: Silver

This new year ushers in significant shifts in leadership, global relations, and geopolitical dynamics. At the same time, many key factors remain unchanged. For investors, the challenge lies in navigating how this blend of new developments and stagnancy will shape their portfolios.

In this week’s The Gold Spot, Scottsdale Bullion & Coin Founder Eric Sepanek and Precious Metals Advisor John Karow discuss gold price forecasts and predictions for 2025, the role central banks played in gold’s rally, and what buying opportunities are lurking around the corner.

Leadership Changes Across the Globe

The close of 2024 was a global referendum on incumbents, with the overwhelming outcome being their defeat. In 2025, the United States, Canada, the United Kingdom, Germany, and several other leading nations are experiencing significant leadership changes.

In today’s highly globalized and interconnected world, such political shifts have the potential to influence markets on a broad scale. Savvy investors are eager to stay abreast of these changes to keep their portfolios in the best position to thrive.

Bullish Outlook for Gold Prices in 2025

Every turn of the calendar ushers in fresh predictions for the price of gold. At Scottsdale Bullion & Coin, we’ve made a tradition out of averaging those expert forecasts to give investors a rough idea of where the yellow metal might go.

In 2024, the aggregate of these predictions was around $2,500/oz. Gold’s unprecedented rally, which posted stellar gains, outperformed these expectations. However, our estimates have nearly always been in the ballpark or below where gold ends up.

Gold raged over 35% in 2024. It was one of the best years ever.

– Scottsdale Bullion & Coin Founder Eric Sepanek

The gold price predictions for 2025 have gold clocking at an average of just over $3,000/oz, marking a ~14% jump from spot gold prices at the start of year. These bullish forecasts reflect the resilience of gold-positive economic and geopolitical conditions.

Central bank gold demand is the core catalyst for the yellow metal’s dramatic growth over the past few years, especially in 2024. Following a record setting first half and third quarter, governmental consumption stretched to 53 tons in November. Emerging markets led the buying frenzy with Poland, India, and China topping the pack.

US Policies Continue to Influence Central Bank Gold Buying

This modern-day gold rush isn’t happening randomly. Central banks are making a concerted effort to offload the dollar and onload gold bullion. Although this global de-dollarization trend has been decades in the making, the West’s weaponization of the dollar against Russia following its invasion of Ukraine fueled the movement to new heights.

You saw gold prices fly up so fast because the United States started using our dollar as a weapon.

– Scottsdale Bullion & Coin Founder Eric Sepanek

This development marked a stark transition where foreign nations started viewing USD as a liability instead of an asset. The result had been a general shift away from the dollar in favor of physical gold—an asset that can’t be switched off, frozen, or otherwise controlled from an outsider. This uneasiness about the dollar is hitting foreign retail investors, too, with individual gold demand rising in conjunction with central bank purchases.

People are buying gold because, instinctively, they know that’s the place where you can put your money, and it’s not going to disappear. That’s its history.

– Precious Metals Advisor John Karow

Unpacking Trump’s tariff policy reveals how the Presidency may continue leveraging the dollar to coerce foreign actors, further driving central banks toward gold bullion and harming the dollar’s demand.

China’s Gold Binge Reignited

Nowhere has this switch up from dollar reserves to physical gold been more apparent than in China. The People’s Bank of China (PBOC) accumulated record amounts of gold throughout 2022, 2023, and most of 2024 before taking a months-long hiatus. Recently, China snapped that dry spell with a 5-ton purchase in November and continued buying in December 2024. Deteriorating US-China relations and already established gold-buying quotas suggest the PBOC will continue topping up its reserves far into the future.

The dollar’s antagonistic posture isn’t only making the Chinese central bank nervous. The country’s public is also growing increasingly wary of the dollar’s threat, leading to heightened retail demand. As the world’s second-largest population, Chinese investors can significantly sway gold prices. This retail demand is largely concentrated in the jewelry market, similar to India. For perspective, Chinese jewelry consumption reached 373 tons in the first three quarters of 2024, far outpacing PBOC demand.

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Gold is irreplaceable, says CME Group, in light of the yellow metal’s remarkable strength. In the face of harrowing economic and geopolitical conditions, the popular precious metal has once again proven its unparalleled ability to keep pace with inflation and adapt to various macroeconomic pressures.

Gold’s Versatility is Unmatched

Gold’s unrivaled versatility has established it as “one of the oldest and most reliable assets,” according to Jin Hennig, global head of Metals at CME Group. This “chameleon” asset uniquely adapts to varying economic challenges, delivering consistent value to investors amid volatile and unpredictable shifts.

Elise Backman, a commodity investor at Wellington Management, highlights that the severity and pace of these changes have intensified in recent years. Through global pandemics, economic upheavals, and full-scale wars, gold has responded by maintaining and steadily rising in value. In summary, CME Group says “There is nothing else in the world that is a substitute for gold.”

“Financialization” Cements Gold’s Value

The Gold Standard might be a relic of the past, but the yellow metal has remained a foundation of the world economy. In what the CME Group dubs gold’s “financialization”, the precious metal has become increasingly integrated into global financial markets. Currently, gold fulfills several crucial purposes for private and public investors: a store of value via gold reserves, a trade mechanism to bypass dollar-dominated markets, and a hedge against inflation in diversified portfolios. This deepening of gold’s financial ties has increased the number of market participants while reinforcing its role as a safe-haven asset, leading to greater value.

Gold’s Proving Grounds

A handful of events cemented gold’s status as a safe-haven asset in recent decades, according to the CME Group:

Global Financial Crisis

The US housing market crash ushered in a worldwide economic meltdown which wreaked havoc on investments across the globe. In the aftermath, investors–from central banks and financial institutions to retail investors–lost faith in the fiat-based system that contributed to the catastrophe. This 2008 financial meltdown reversed decades of gold net-selling throughout the 1990s and early 2000s and sparked a modern-day gold binge that has yet to fade.

Global De-Dollarization

The global push to de-dollarize has been another major milestone in gold’s rise to its highly coveted status as the go-to safe-haven asset. Although governments have tried to detether from the US dollar for decades, these efforts reached an inflection point following the Russian invasion of Ukraine. The West’s onslaught of dollar-backed sanctions encouraged the Kremlin and its allies to pursue gold to bypass international restrictions.

US Fiscal Policy

The CME Group points to misguided domestic fiscal policies as another significant boon to gold’s growing appeal. The reigning Modern Monetary Theory (MMT), which views limitless spending as a solution to mounting federal debt, has wrecked the dollar’s value. In its wake, this experimental policy has left a $36 trillion debt, inflationary pressures, and eroding trust in the dollar. The more the US pushes these flawed fiscal policies, the stronger the case for gold as a wealth-preserving alternative.

👉 Related Read: What Are Safe Haven Assets?

Gold remains below record highs posted before the US presidential race. The yellow metal’s 2024 rally had been muted following this pivotal political contest, but analysts argue the current “Trump dump” isn’t only short-lived but entirely predictable. Leading fund managers put forth a gold-positive thesis that the fundamentals driving the precious metal are strong enough to push past any potential headwinds caused by the new administration.

The Post-Election Effect

Following a relentless 35% upsurge, gold prices cooled off by around 8% in the post-election environment. This relatively minor drop seemed more dramatic given prices had risen steadily since the beginning of the year, charting more than 40 record highs on the way. Not only is this slump minor in the grand scheme of gold price action, but it’s indicative of normal behavior.

This trend shows a strong bias toward Republican candidates, as red wins since 1976 have coincided with an average 4.54% 60-day decline in prices. After Trump’s upset victory in 2016, the yellow metal dropped by 11.6%. Yet, this first “Trump dump” was followed up with a decisive 54% gain throughout the rest of the term, only bested by gold’s performance under George W. Bush’s two terms where it rose by more than 220%.

Gold’s Swift Recovery

The yellow metal is already demonstrating its strength with a decisive recovery from the post-election retreat. Prices reached a relative low of $2,562.10/oz on November 15 before immediately shooting back up to $2,716.04 only a week later, recovering most initial losses. Gold prices pierced the $2,700 mark another time in mid-December, signaling strong momentum to the upside.

The end of the year saw a trading range around $2,600 with only a short-lived dip below, indicating consolidation in preparation for the potential next leg up. Besides, December tends to be one of the slowest months of the trading year as investors tune out of the market due to holiday festivities.

How will gold respond to Trump 2.0?

Thus far, gold’s post-election performance has been laser-focused on the race’s outcome. However, in 2025 and beyond, the yellow metal’s performance hinges more on concrete policies pursued by Trump and Republicans which enjoy a majority in both houses.

Advocates and opponents broadly agree Trump 2.0 will have a mixed effect on gold, with some indicating a trade-off of short-term pain and long-term gain. Generally, the administration’s disruptive economic policies are expected to increase inflationary pressures—a bullish sign for gold—even if putting the American economy at an advantage.

The Fundamentals Favor Gold

The uncertainty surrounding Trump’s economic impact might be stealing the spotlight, but there are many more factors influencing gold prices. The variables fueling the rally fall outside the influence of the President-elect, no matter how broadly he wields his executive power.

Inflation

As mentioned before, the incoming administration’s disruptive agenda is expected to keep inflation around, which is positive for gold prices. As Cameron Judd, gold strategy portfolio manager for Victor Smorgon Group, explains, “I think (Trump’s election) is more inflationary, which is one of the key principles of our gold investment strategy.”

Interest Rate Cycle

The Federal Reserve flipped the switch on years-long rate hikes with a decisive slash. With the economy on an easing trajectory, the dollar is on track to lose appeal as the opportunity cost of owning physical assets decreases. “Our view is that the interest rate cycle is going to be the key driver,” highlights Stephen Gorenstein, portfolio manager for Ari Fund.

National Debt

The exploding national debt, which is projected to reach $43 trillion under Trump, is causing a global transition from the dollar to gold. “A lot of other central banks, particularly those that own a lot of this US debt, like the Chinese and the rest of the BRIC countries will continue to be buying gold,” explains Hayden Bairstow, executive director and head of equity research at Argonaut.

“The reasons to own physical gold right now are more serious than ever. The problems with our debt and the dollar aren’t going away.”

– Todd Graf, Precious Metals Advisor at Scottsdale Bullion & Coin