Gold investments certainly had a great year in 2024, breaking into new all-time highs due to macro factors and investor demand.
Before 2024 closed out, UBS released an insight piece on how gold may perform in 2025. In the article, the UBS team highlighted a variety of factors that could work in gold’s favor.
To start, UBS highlighted how central banks around the globe are continuing to build up their gold reserves. Going further, UBS anticipated that central banks could even buy more than 900mt of gold this year.
Plenty of domestic factors are also supporting the use case for gold. Namely, the uncertainty of future U.S. federal policy may bolster gold’s value as a hedge. This doubt extends to current international conflicts as well
“With the Russia-Ukraine war still ongoing, and the situation in the Middle East no less complicated, we think investor demand for hedges should rise further, boosting inflows to gold exchange-traded funds,” UBS added.
Additionally, the Federal Reserve’s rate cutting regimen should make it easier for investors to buy and hold their gold exposure. Lower rates and a potentially weaker U.S. dollar could do wonders to balloon gold prices throughout 2024.
