Will gold prices rise again in 2025? Key factors investors need to know

Gold prices have been rising nonstop since last year. At the beginning of this year, gold prices significantly exceeded expectations, and as of July, the international gold price( per ounce) is approximately $3,337, up over 39% compared to the same period last year. Domestically, it was recorded at 635,000 won per 1 don( 3.75g), a 43% increase from July of last year.

What are the reasons behind the continuous rise in gold prices? And for the remaining period until 2025, is gold investment still a promising choice?

Global Factors Driving Gold Price Increases

Deepening Geopolitical Instability

The fundamental reason for the rising gold prices is the uncertainty in global affairs. Ongoing risks such as trade conflicts between the US and China, the Russia-Ukraine war, and Middle Eastern conflicts directly impact the global economy. During such times, investors naturally turn to safe assets like gold.

Historically, gold prices surged during the 2008 global financial crisis and hit record highs during the 2020 COVID-19 pandemic. As uncertainty increases, demand for gold tends to rise repeatedly.

Trend of De-dollarization and Surge in Gold Demand

Many countries are working to reduce dependence on the US dollar. China is promoting the internationalization of the yuan, while sanctioned countries like Russia and Iran are strengthening efforts to hold gold as an alternative asset instead of dollars. India is also increasing the use of its domestic currency, the rupee, in trade settlements.

As de-dollarization policies spread, the international status of the dollar weakens, while global demand for gold increases. This is a key background for the rise in gold prices.

Weakening Economies in Developed Countries

The US faces inflation issues, and Europe is experiencing growth slowdown due to geopolitical risks. When economies weaken, investors shift funds from interest-bearing assets like bonds and deposits to tangible assets like gold, which can hedge against inflation.

Impact of Interest Rate Cuts on Gold Prices

When interest rates fall, the attractiveness of interest-bearing assets like deposits and bonds diminishes. Consequently, the opportunity cost of holding gold decreases, making gold investments more attractive. This was evidenced when the Fed cut interest rates by 50 basis points in September last year, causing gold prices to surge.

What Are the 2025 Gold Price Outlooks?

Analysis from financial market experts and major investment banks is generally optimistic.

Bullish Scenarios:

• JP Morgan predicts gold will reach $3,675 per ounce by the end of this year. Since the current price already exceeds $3,300, this forecast is quite plausible.
• Goldman Sachs and Citigroup have set a target of $3,000 per ounce for this year, which has already been achieved.
• The consensus among banks and refining companies, as compiled by the Financial Times, expects prices to exceed $2,795 by year-end.

Bearish Scenarios:

• Barclays and Macquarie forecast a decline to $2,500 per ounce by the end of the year. However, considering current trends, the likelihood of this scenario materializing appears low.

Considerations for Investment

Some experts suggest that gold prices may adjust or decline in the second half of 2025. Therefore, when investing, pay close attention to the following points:

• Monitoring global geopolitical situations
• Central bank interest rate decisions
• USD exchange rate fluctuations
• US inflation trends

Despite the ongoing upward trend, variables still exist. It is wise for investors to diversify through phased buying and risk management to build a stable position.

Continuously checking current gold prices and market trends, capturing investment opportunities, and responding flexibly to market changes are key to successful gold investment in 2025.