Gold’s 2025 rally has further to run according to strategists, as factors including geopolitical volatility, continued central bank demand and perceptions of a shortage drive the precious metal higher. The spot gold price has been on a tear since late December, rising from $2,587.6 on Dec. 18 to $2,941.1 on Feb. 19, smashing through all-time highs and consecutive weekly gains this year. This year’s gains come after global gold demand hit a record high in 2024, according to the World Gold Council. A fresh assessment of market conditions has led UBS to revise its gold price forecast for the year higher, strategist Joni Teves said in a note this week, with a peak expected in the latter half of 2025 and a potential high upward of $3,200. UBS then sees prices gradually easing and settling at elevated levels in the coming years. A major factor that drove gold gains last year has only intensified in 2025: uncertainty over the impact of U.S. President Donald Trump’s policymaking on the world economy and international relations. @GC.1 YTD line Gold COMEX. “The policies of the new U.S. administration — particularly the potential for tariffs — have already caused dynamics in the gold market to shift,” John Reade, senior market strategist at the World Gold Council, told CNBC by email. “The first dynamic is around price, with uncertainty surrounding the scope, timing, and impact of these tariffs has heightened overall market risk, prompting investors to turn to gold as a safe-haven asset.” “The second changing dynamic is the movement of physical gold, and rumors of so-called shortages of gold,” Reade continued. “To be clear, there is no general shortage of gold, but large shipments of gold into the United States, done by traders to pre-empt possible U.S. import tariffs, has led to reduced availability of gold in the London market, which in turn has driven up borrowing costs,” Reade said. “With market and geopolitical uncertainty likely to persist, it is likely that disruptions to the gold market will continue for some time to come.” Investor ‘FOMO’ UBS’s Teves said that along with deep rooted bullish sentiment and stronger-than-expected central bank demand — which has been a key price driver in recent months, as the institutions seek to diversify their reserves and hedge against currency fluctuations — traders would have a degree of “FOMO,” or “fear of missing out,” on gold opportunity. “After missing several (brief/ shallow) buying opportunities in 2024, investors are likely wary of repeating the same patterns and may want to take advantage of corrections sooner this time around,” she said. “Moreover, liquidity issues could amplify rallies and make the market vulnerable on the upside to any pick up in physical demand.” Luciano Duque, chief investment officer at C3 Bullion, noted that the increase in central banks’ gold holdings have broken almost all records for gold purchases in the last 15 months. “The last 45 days or so have been particularly interesting regarding [metals futures and options market] Comex, where we had a big spike in delivery notices. It looks like big institutions are indeed adding to their gold stockpile,” Duque said by email. Gold-related stocks including Wheaton Precious Metals , Osisko Gold Royalties and Canada’s Franco-Nevada are set to benefit from these trends, analysts at RBC Capital Markets said in a note last week. “The outlook for gold equities remains constructive, supported by attractive valuations, low crowding, and a supportive macro outlook for gold,” they said.
