Gold soaring amid geopolitical fears: $3,000 barrier in sight
The price of gold has exceeded $2,800 per ounce, and experts anticipate it may surpass the $3,000 mark this year. Gold is gaining value due to increasing geopolitical uncertainty, explains Maksymilian Kuch, an XTB analyst. Marek Rogalski from DM BOŚ advises on what investors should consider to avoid losses.
The price of gold has reached a record level of over $2,800 per ounce, marking an all-time high. Several factors contribute to this trend. The precious metal's popularity is largely attributed to investors' expectations of another interest rate cut in the USA. Additionally, uncertainties surrounding Donald Trump's policies present a strong argument.
Gold price forecasts for 2025 are optimistic. Analysts predict a further increase in the metal's value. Michael Oliver from Momentum Structural Analysis suggests that gold may break the $3,000 barrier per ounce. Experts from Citi Bank highlight that historically, gold performs best during periods of monetary easing.
Gold flows from London to New York in fear of tariffs
Record gold prices and disruptions in the physical bullion market may signal risks for investors. Gold reached a historic high of $2,861 per ounce, and in pound sterling, it surpassed the £11,684 mark, beating the record from November 2024, explains Maksymilian Kuch, XTB analyst, in an interview with money.pl.
Two key factors drive the current bull market: the sustained strong demand from central banks, which purchased over a thousand tonnes of gold in 2024 for the third consecutive year, and the unprecedented flow of physical bullion from London to New York, spurred by fears of import duties from the Trump administration, the expert notes.
Over the past two months, 12.2 million ounces of gold have been delivered to the COMEX warehouses (a commodity exchange in New York - editor's note), increasing their stocks by 70 percent. This has caused liquidity issues in London, where transaction fulfillment waiting times at the Bank of England have extended up to eight weeks, he calculates.
Gold once again a safe haven
Our interlocutor echoes the thoughts of many commentators: the return of Trump and the risk of a trade war reaffirm gold's status as a "safe haven" for capital.
Unlike stock markets, which react nervously to any announcement of new tariffs, gold increases in value precisely due to growing geopolitical uncertainty. According to a Goldman Sachs survey, 32 percent of institutional investors consider gold the most attractive commodity of 2025, the analyst highlights.
The forecasts from major investment banks suggest the possibility of surpassing the $3,000 level this year, although high interest rates maintained by the Fed may temporarily restrain growth, he emphasises.
Is buying gold risky?
Marek Rogalski, Chief Currency Analyst at the Brokerage House of the Environmental Protection Bank, stresses that investments in gold should be considered long-term, noting that its value is closely tied to the złoty-to-dollar exchange rate. He warns that potential profits from rising bullion prices could be offset by an unfavourable exchange rate, as he explains in an interview with money.pl.
Record demand for gold
According to the World Gold Council report, in the fourth quarter of 2024, central banks continued their intensive gold purchases, maintaining a trend throughout the year. Their demand exceeded a thousand tonnes for the third consecutive year, reaching 333 tonnes in the last quarter alone. Notably, the National Bank of Poland emerged as the largest net buyer among central banks, increasing its reserves by 90 tonnes.
In 2024, gold investments hit their highest level in four years, totalling 1,180 tonnes, a 25 percent increase year-on-year. A particularly noteworthy change was observed in ETFs, which maintained a stable level of assets for the first time since 2020, contrasting with significant outflows in the prior three years.
Meanwhile, the demand for gold in the form of bars and coins remained similar to 2023, at 1,186 tonnes. However, the purchase structure shifted, with interest in bars increasing while demand for coins decreased.
Industry hungry for gold
In 2024, the technology sector increased its demand for gold by 21 tonnes, representing a 7 percent rise, mainly due to advancements in artificial intelligence. The electronics industry recorded a 9 percent increase in consumption, reaching 270.6 tonnes.
The jewellery sector was the only one experiencing declines, with annual gold consumption in this sector decreasing by 11 percent to 1,877 tonnes, due to consumers' limited purchasing power. Despite this, the value of spending on gold jewellery rose by 9 percent, reaching $144 billion.
Gold and silver on the offensive
Saxo Bank highlights in its analysis that not only gold but also silver saw strong growth in the last quarter of 2024. The demand for investment metals was driven by an increasingly uncertain geopolitical landscape, where global tensions and economic shifts prompted investors to seek safer assets.
Experts also explain that central banks aggressively buy gold to diversify away from the dollar and dollar-based assets like bonds, which indirectly supports silver prices.
Silver, like gold, is crucial for industry as around 55 percent of total demand for this metal comes from the sector. Sectors such as electronics and renewable energy, especially photovoltaic technologies, have contributed significantly to this growth.
Robert Kędzierski
