Wall Street Confident Gold Will Continue 2024 Rally

Key Takeaways

• Gold prices are expected to rise moderately in 2025, building on the momentum of the 2024 rally.
• Central bank demand will remain a key support for the precious metal.
• Investors face a choice between gold and Bitcoin as a hedge against inflation.

Wall Street is confident that gold will continue to see price gains in 2025, albeit at a more measured pace compared to last year’s impressive surge.

While the rally in 2024 delivered a remarkable 27% jump in gold prices, analysts predict a slower, steadier rise this year, driven by factors like central bank demand and the prospect of interest rate cuts.

However, the strength of the U.S. dollar and ongoing geopolitical risks could temper some of these gains.

Gold’s Continued Growth in 2025

After a historic year for gold, Wall Street analysts expect the metal to reach approximately $2,795 per ounce by the end of 2025, a 7% increase from current levels.

A survey conducted by the Financial Times  supports this forecast. The World Gold Council  has also voiced a positive, albeit more modest, outlook for the metal this year.

Goldman Sachs  takes the most optimistic stance, forecasting a price of $3,000 per ounce, supported by strong central bank demand and potential interest rate cuts by the Federal Reserve.

Meanwhile, Barclays  and Macquarie  take a more cautious approach, predicting a slight decline in gold prices, with forecasts of around $2,500 per ounce.

Despite potential short-term pressure from the strength of the U.S. dollar, Macquarie analysts expect steady demand from the official sector and increased physical buying to provide support for gold prices.

Interest Rates, Trump, and Global Instability

Expectations of further interest rate cuts by the Federal Reserve, mounting concerns over U.S. government debt under President-elect Donald Trump, and ongoing conflicts in regions like the Middle East and Ukraine are also expected to boost gold prices.

These factors contributed to bullion’s largest annual gain since 2010 last year.

Falling U.S. interest rates largely supported the rally in gold during the second half of last year.

However, the Fed’s December rate cut, coupled with signals of a slower pace of reductions in 2025, caused a slight price pullback.

Lower interest rates generally benefit gold as a non-yielding asset, reducing its opportunity cost.

Société Générale  emphasized that Trump’s election victory in November created one of the most favorable environments for gold.

Factors such as potential increases in U.S. fiscal spending and heightened geopolitical uncertainties may further bolster the metal’s appeal.

Gold or Bitcoin: The Best Hedge Against Inflation?

According to Jan van Eck, CEO of VanEck , the growing fiscal deficit in the U.S. remains a concern despite government efforts to control spending.

Van Eck projects $500 billion in savings next year but warns it won’t prevent the deficit from rising. The CEO recommends both gold and Bitcoin as key hedges against inflation and fiscal uncertainty, not just one of them.

“Central bank purchases and de-dollarization drive gold’s bull market. Bitcoin’s bull cycle post-halving suggests the potential for $150,000–$170,000 in this cycle,” he noted.

VanEck and other firms remain bullish on gold but see untapped potential in the mining sector.

Analysts highlight a 28% gain for gold versus 21% for mining stocks. This suggests the latter’s leverage could lead to future outperformance.

Gold producers are enjoying record margins and strong cash flow, which could close this disconnect.

Despite optimism, VanEck warned of market volatility due to uncertain central bank policies, geopolitical events, or inflationary surprises.

“Both gold and Bitcoin remain resilient hedges, aligning with investor shifts toward alternative and decentralized assets,” Jan van Eck said.