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January 15, 2025

Gold Prices Set to Surge: UBS Analysts Predict Historic Highs for 2025

Gold prices are set to soar, reaching new historic highs in 2025. This surge is driven by robust investor demand for safe-haven assets, especially amid anticipated equity market volatility, as highlighted in a recent UBS report.


A Look Back at 2024: Gold’s Surge

  1. Record Growth

    • Gold prices surged 27% in 2024, achieving an all-time peak of $2,788 per ounce in October.
    • The yearly average price reached $2,389 per ounce, marking the strongest annual performance since 2020.
  2. Post-Election Volatility

    • Although a brief sell-off occurred when investors shifted towards riskier assets following Donald Trump’s election win, gold retained its standing as a reliable hedge against uncertainty.

Key Variables Influencing Gold Prices in 2025

  1. Dollar Strength and Rising Yields

    • The anticipated strength of the U.S. dollar coupled with increased Treasury yields may dampen gold prices early in 2025.
    • A stronger dollar can elevate gold prices for international buyers, while rising yields can make non-yielding assets like gold less attractive.
  2. Federal Reserve Decisions

    • Expectations for rate cuts from the Federal Reserve have been tempered by strong economic data and Trump’s tariff plans, which could sustain inflation.
  3. Stock Market Volatility

    • Concentrated portfolios and high stock valuations may increase stock market volatility.
    • Such conditions could result in more investors turning to gold as a diversifier for their portfolios.

The Role of Gold as an Inflation Hedge

  • UBS analysts assert that inflation-hedging demand will likely counteract the headwinds from a stronger dollar and rising yields.
  • Historical patterns show that gold tends to perform exceptionally well during inflationary times and uncertainty.

Looking Ahead: Record Highs Expected

  • UBS forecasts gold will surpass its 2024 record to establish a new all-time high in 2025.
  • Gold’s reputation as a safe-haven asset and diversifier will solidify its role in investors’ portfolios during market turbulence.

Action Steps for Investors

Investors interested in gold’s performance should actively monitor market dynamics:

  • Consider using the Entreprenerdly.com Commodities Price API to analyze long-term trends in commodity markets.
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