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

100 Days of Trump's Presidency

While the dollar prepares for key economic data that could determine the Federal Reserve's next course of action, Donald Trump reflected on his first 100 days as President

Jakub Novak 13:31 2025-04-30 UTC+2

USD/CAD: The Pair Consolidates Under Pressure

USD/CAD is showing sideways movement, with spot prices currently trading around the 1.3840 level. The decline in crude oil prices to a three-week low, amid concerns that a full-scale trade

Irina Yanina 13:26 2025-04-30 UTC+2

Canadian Dollar Preparing for a Breakout

Retail sales in Canada fell by 0.4% month-over-month in February but rebounded in March with a strong increase of 0.7%. On a year-over-year basis, retail sales declined to 4.7%

Kuvat Raharjo 13:09 2025-04-30 UTC+2

Stable Inflation to Support the Australian Dollar

Inflation in Australia remained steady at 2.4% year-over-year in Q1, defying expectations of a slight slowdown to 2.2%. The quarterly increase of 0.9% also exceeded forecasts, while core inflation slowed

Kuvat Raharjo 13:03 2025-04-30 UTC+2

U.S. GDP and PCE Data Unlikely to Drastically Shift Market Conditions (Possible Resumption of #NDX and #SPX Growth)

Markets are already fatigued by the chaos unfolding in Donald Trump's mind and among his followers. Everything remains extremely unclear, so market participants are now fully focused on today's important

Pati Gani 09:48 2025-04-30 UTC+2

The Market Hears What It Wants to Hear

How far will greed carry the crowd? The late April rally in the S&P 500 somewhat sweetened the bitter pill for Donald Trump. His first 100 days in office have

Marek Petkovich 09:23 2025-04-30 UTC+2

What to Pay Attention to on April 30? A Breakdown of Fundamental Events for Beginners

A considerable number of macroeconomic events are scheduled for Wednesday, but we doubt they will have any meaningful impact on currency pair movements. The market continues to ignore most macroeconomic

Paolo Greco 06:28 2025-04-30 UTC+2

GBP/USD Overview – April 30: The Illusion of U.S. Democracy and Trump's Impeachment

The GBP/USD currency pair saw a slight downward correction after Monday's rise, which came out of nowhere. However, it's difficult to call this minor move a "dollar recovery." The U.S

Paolo Greco 03:29 2025-04-30 UTC+2

EUR/USD Overview – April 30: The Main Mystery of 2025 Revealed

The EUR/USD currency pair continued trading within a narrow range on Tuesday, showing relatively low volatility. In reality, 80 pips per day is not a bad volatility level

Paolo Greco 03:29 2025-04-30 UTC+2

NZD/USD: Bullish Prospects Amid Uncertainty

Although the past week was completely uninformative regarding fundamental indicators, it allowed adjustments to forecasts on economic growth, inflation, and the Reserve Bank of New Zealand's policy strategy based

Kuvat Raharjo 00:43 2025-04-30 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.