Gold prices could surge to $3,000 an ounce by the first quarter of 2025, driven by growing uncertainty surrounding the economic policies of a new Trump administration, according to the Gold Traders Association (GTA). The prediction suggests that the return of former President Donald Trump to the White House on January 20 could trigger global economic instability, prompting a spike in demand for safe-haven assets like gold.
Gold Prices Set to Close 2024 Higher
Gold has experienced a remarkable rally in 2024, with prices set to end the year more than 27% higher. This surge has been driven by US monetary easing and significant gold purchases by central banks. However, the rally has recently slowed, with gold prices experiencing some resistance due to a stronger US dollar following Trump’s electoral victory.
Historically, lower borrowing costs have been supportive of gold prices, as the precious metal does not yield interest like bonds or stocks.
Gold Traders Association Weighs In
GTA President Jitti Tangsithpakdi explained that while gold prices had recently cooled due to market speculation, they are expected to rise sharply in the coming months. “The global economy could face turmoil under Trump’s leadership, particularly in the US, where higher import tariffs could lead to rising product prices,” he stated. “This would likely fuel demand for gold, which is viewed as a safe haven in times of economic uncertainty.”
Jitti also noted that China’s central bank, which had paused its gold purchases for six months, has resumed buying, signaling growing confidence in the metal’s long-term value.
Market Uncertainty and Federal Reserve Policies
Chutikarn Santimetvirul, Assistant Director of Securities Analysis at Phillip Securities, pointed to recent uncertainty surrounding the Federal Reserve’s monetary policy as a factor contributing to fluctuations in gold prices. Although the US central bank had initially signaled four potential interest rate cuts in 2025, it revised its outlook after a 25-basis point reduction on December 18, now forecasting only two cuts.
“The US economy remains strong, and there’s no immediate need for aggressive rate cuts in 2025,” Chutikarn said.
Phillip Securities now expects gold to face resistance at $2,650 per ounce by the end of the year, with support levels in the $2,580 to $2,600 range.
As investors brace for the potential economic shifts of a Trump administration, the demand for gold as a safe-haven asset is likely to intensify, further elevating its market value in the coming months.
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