Gold Set to Surpass $3,000 in 2025

Bybit, the world's second-largest cryptocurrency exchange by trading volume, has released its latest Bybit Commodity Insight Report.

The world’s second-largest cryptocurrency exchange by trading volume, Bybit has released its latest Commodity Insight Report. The report provides key insights into the macroeconomic and geopolitical trends driving gold’s bullish trajectory, examining the factors that could push the precious metal to new all-time highs.

Despite a stellar run in 2024, which saw gold prices rally to their highest levels since early 2023, some analysts believe that the yellow metal could go even higher in the coming year.

According to Bybit, several macroeconomic and geopolitical factors are setting the stage for gold to potentially surge above the $3,000 mark in 2025.

Here are some of the key takeaways from the report:

Macroeconomic Drivers

With inflation projected to remain above the 2% throughout 2025, gold continues to serve as a hedge against declining purchasing power. As a result, consumer demand for goods and services remains a key driver of interest in the precious metal. Moreover, the Federal Reserve is expected to cut interest rates during the year, which could further increase demand for gold. Lower real interest rates make gold more attractive than fixed-income assets, leading to increased capital flows into the metal.

"The year started with expectations of two to three Fed rate cuts by year-end, although inflation remaining sticky could lead to slower-than-anticipated rate cuts. Nevertheless, lower real interest rates are expected to render gold more attractive than fixed-income assets, ultimately increasing capital flows into the metal. As a result, we anticipate higher lows in gold prices in 2024, setting the stage for a potential surge above the $3,000 mark," the report said.

Geopolitical Uncertainty

Ongoing conflicts and global instability are reinforcing gold’s safe-haven appeal. Throughout history, gold has outperformed during periods of geopolitical stress, as investors tend to seek refuge in the precious metal during times of uncertainty.

Currently, with the Russia-Ukraine war showing no signs of abating and several geopolitical hotbeds simmering, the environment suggests that this trend will continue in 2025.

Central Bank Accumulation

In 2024, central banks purchased over 1,000 metric tons of gold, a trend that is expected to persist in 2025 as countries like China and Russia diversify away from the U.S. dollar. This steady accumulation is supporting gold prices and limiting downside risk.

"Having largely completed their post-Soviet Union sell-off of gold reserves in the 1990s, central banks are now net purchasers of the metal. In 2024, central banks reportedly purchased a record 1,120 metric tons of gold, continuing a trend that began in 2019. This marks the ninth consecutive year of net purchases by central banks, according to the World Gold Council (WGC). Notably, China and Russia, which have been diversifying away from the U.S. dollar, were among the largest purchasers of gold in 2024, buying 198 and 188 metric tons, respectively," the report noted.

Technical Strength & Market Sentiment

Gold remains in a strong uptrend, with key resistance levels in focus. A break above the $3,000 psychological barrier could trigger a burst of buying activity and lead to a rally towards the next target at $3,300.

Moreover, ETF inflows remain healthy, indicating sustained interest from institutional investors, while rising futures positions suggest that traders are becoming increasingly bullish on the metal.

Overall, the macroeconomic backdrop, geopolitical uncertainty, central bank activity, and technical indicators suggest that gold could be poised to move higher in 2025, potentially reaching levels above $3,000. However, it's important to note that this prediction is based on the analysis of available data and trends at the time of writing.

For a deeper analysis of these trends, access the full Bybit Commodity Insight Report from Bybit.