Gold Outlook for 2025: Gold prices in international markets remain at a record level. Gold futures in New York rose 0.20% to $ 2,990.17 an ounce. Recently, gold prices touched a historic level of $ 3,000, while on MCX it reached Rs 87,866 per 10 grams. This boom remains due to reasons such as economic instability at global level, shopping being done by central banks of many countries and the possibility of cutting interest rates. However, before making decisions related to investment, it is also necessary to keep some risk factors in mind, due to which correction can come in gold price.
Can gold touch 92,000 levels?
The report of Kedia Stocks & Commodities Research states, “Gold prices have already touched our estimated target of 2025. Although short-term fluctuations may continue to come, but in 2025, there is a possibility of reaching Rs 92,000 per 10 grams in 2025.” The Kedia Advisory report also mentions 10 important factors, due to which the trend of fast is expected to remain:
10 major reasons for boom in gold
1. Trade war and tariff
The trade war between the US and China is increasing continuously. The US Donald Trump government has increased economic instability at the global level due to the threat of imposing 200% tariff on European liquor on European liquor. In such an environment, the demand for gold has increased in the form of safe haven asset among investors.
2. Record purchases of gold by central banks from many countries
Central Banks from many countries have purchased a large amount of gold in 2024. Poland has increased 90 tonnes in its gold holdings, Turkey 75 tonnes and India 73 tonnes. In an attempt to reduce dependence on dollar, many countries are increasing the gold share in their foreign exchange reserves.
3. Possibility of reducing interest rate by Federal Reserve
It is expected in the market that the US Federal Reserve will cut interest rates at least three times in 2025. This will reduce the cost of debt and increase the demand for non-yielding assets like gold.
4. Physical gold deficiency and supply chain crisis
In January, 151 tonnes of gold was removed from London and sent to New York, which reduced the availability of physical gold. Due to this, gold delivery is delayed and prices are strengthened.
5. Weak US dollars and decreasing bond yields
The dollar index (DXY) has fallen below 104 and the 10-age American Treasury Yield has fallen to 4.27%. This has increased the attraction of gold, because investors are now considering gold as safe investment instead of dollars.
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6. Jio-Political Risk
Factors such as Russia-Ukraine War, US-China trade disputes and 300% increase in gold shopping from Iran are promoting gold demands. In such an environment, investors are also increasing investment in gold for risk management.
7. Strong demand and ETF inflow of physical gold
Comex’s chests currently have 1,250 tonnes of physical gold. At the same time, gold-backed ETFs also have 15% growth in 2024. Gold prices are getting support from this.
8. Inflation pressure and currency deputy
Inflation in the US (US CPI) has come to 2.8%, but due to tariffs and monetary Easing, there is a possibility of increasing inflation again. Gold is generally considered to be an investment protection from inflation, which has increased its demand.
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9. Stock market fears of volatility and recession
The stock markets are seeing a decline at the global level. Nifty -16.29% from its recent levels, Dow Jones -9.78%, S&P500 (S&P 500) -10.48% and NASDAQ are running down around -14.07%. In these circumstances, investors are investing money in gold, due to which its prices are increasing.
10. Gold deposit by governments on a large scale
Iran has converted 20% of its foreign exchange reserves into gold. Due to the adoption of a similar strategy by many countries, the demand and prices of gold remain at high levels.
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It is also important to take care of these 5 risk factors
According to the report of Kedia Advisory, the reasons mentioned above are responsible for the boom in gold, but at the same time many risk factors have also been reported, which can bring corrections in gold in the coming days. Therefore, before making decisions related to investment, it is also important to take care of these things:
1. If conditions like trade war between the US and China are solved and both countries are ready to cut tariffs, then gold safe haven demand may be reduced and prices may fall.
2. If the dollar goes above the index 105 and the 10-air Treasury yield crosses 4.5% level, then the price of gold may be pressure.
3. If inflation rates persist high or there are signs of improvement in the US economy, then the US Federal Reserve (US FED) can keep interest rates at higher levels, which can reduce gold demand.
4. If there is recovery in the global stock market, then investors can be ready to take risks again and can invest in equity by withdrawing money from gold.
5. The US has offered a ceasefire to stop the war in Russia-Ukraine. If it gets success in it, then the geo-petitical risk premium of gold can decrease, which can reduce its prices.
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Decide by understanding the risk
Gold prices are currently around historical height and due to many global factors, it remains strong. But before making decisions related to investment, it is important to understand the possible risk factors.
(Disclaimer: The estimates given in this article are part of the advisory issued by the expert/brokerage house. These are not the idea of Financial Express.
