US Interest Rate Cuts to Drive Gold Prices Higher, but a Shift in Investment Focus in 2025 May Lead to a Decline in Gold Prices
Gold stores are experiencing a “strong start,” but industry insiders told TiMedia APP that fluctuations in international gold prices are not related to China’s seasonal factors but are more closely linked to recent events and data in the US. After a 27% increase in 2024, international gold prices continue to show high volatility and are being driven upward by rising inflation expectations and hedging demands.
Some foreign institutions expect that the probability of gold transitioning to high volatility in 2025 will increase, and market fluctuations will further intensify, with a projected range of 3,000.
Yang Yijun, the chief analyst at Willshin Investment Consulting, believes that the gold market will continue to perform well in 2025, with potential momentum to sustain its strength. “Since we believe that gold will hit $3,000 in 2025, it should be bought on dips at the beginning of 2025,” he said.
Many foreign institutions still maintain their prediction that gold will reach 3,175 in 2025,” said Fxstreet analysts. Once it exceeds 2,800 may be the next resistance level before reaching the target price of $3,000.
A macro researcher from Xingye Securities told TiMedia APP that the fluctuations in gold prices over the past two weeks are mainly due to the change in the US government. After Donald Trump took office, the number of new jobs in the US job market has fluctuated, with unemployment rates showing an upward trend, and the pace of corporate expansion may slow down, leading to pessimistic expectations for economic growth. In addition, inflation has slowed but shows signs of rebounding. To bring inflation back to a reasonable range and stimulate the economy, interest rate cuts may slow down. Therefore, gold prices are more likely to form high volatility rather than continuing to rise steadily as they did in January.
However, industry insiders revealed to TiMedia APP that the probability of sudden instabilities in the global economic situation in 2025 will increase. After the bull market in 2024, many European, American, South Korean, Japanese, and Southeast Asian countries will experience a slowdown in economic growth. Furthermore, given the predictions about US trade and tariff policies, foreign trade in countries other than the US will inevitably be affected to varying degrees. In this scenario, the Federal Reserve will continue to use interest rate cuts to reduce corporate financing costs and stimulate domestic investment and consumption, thus providing further room for gold prices to rise.
Independent analyst Lv Chao believes that since Donald Trump officially took office, gold bulls have continued to gain strength, with international gold prices rising from 2,730 and $2,750 per ounce. This is because Trump’s economic and foreign policies, which deviate from tradition, have further exacerbated global divisions and instability, stimulating hedging sentiment. Currently, international gold prices are once again approaching historical records, and the likelihood of setting new historical records is high.
Song Jiangzhen, a researcher at the Beijing Gold Economic Development Research Center, believes that influenced by global easing
