Gold remains well-supported in the current uncertain market environment. Fears of tariff threats, geopolitical risks, potential Fed rate cuts this year, and sustained central bank demand are expected to further bolster gold in 2025.

Gold: Moon is still far away from here

Gold’s bullish momentum continues as it surpasses the historic $3,000/oz mark, driven by escalating trade tensions, central bank accumulation, and shifting monetary policy expectations. The uncertain landscape surrounding U.S. trade policy, particularly under President Trump’s administration, has heightened concerns over inflation and economic slowdown, fueling demand for gold as a safe-haven asset. ING highlights that persistent trade uncertainties and potential retaliatory measures could further boost gold prices, while ANZ maintains its outlook for gold to reach $3,050/oz in 2025, citing geopolitical risks and a deteriorating U.S. fiscal position as key drivers.

Central bank purchases remain a critical pillar of support, with total known gold ETF holdings rising by 3.5 million ounces this year to nearly 86.4 million ounces. Notably, central banks acquired 1,045 tonnes of gold in 2024, accounting for a fifth of overall demand, and this trend shows no signs of slowing. Emerging market central banks, particularly in China, Uzbekistan, and Kazakhstan, continue to aggressively expand their reserves. China’s central bank added five tonnes in January, marking the third consecutive month of accumulation, reminiscent of its prolonged buying spree during Trump’s first term.

Macroeconomic conditions further strengthen gold’s bullish case. Recent weakness in U.S. economic data has increased market expectations of more aggressive Fed rate cuts, shifting expectations from 40bps to 80bps. This dovish monetary outlook, combined with a sell-off in the U.S. dollar and equities, has driven investors toward gold as a hedge. Renowned investor Jeffrey Gundlach’s forecast of gold reaching $4,000 underscores the growing concerns over inflation, geopolitical instability, and the weakening credibility of fiat currencies, further reinforcing gold’s upside potential.

While some analysts caution about short-term pullbacks, the broader trend suggests gold’s record-breaking rally has room to extend. With sustained demand from central banks, ongoing ETF inflows, and a shifting macroeconomic backdrop favoring gold as both a hedge and safe haven, further gains appear likely.