Gold in 2024 and Projections for 2025: Insights from World Gold Council and Heraeus Precious Metals

Gold demonstrated significant growth in 2024, with prices rising 28% by November, marking their best performance in over a decade. This growth was fueled by central bank purchases, investor demand, and gold’s role as a hedge against economic and geopolitical risks. Insights from the World Gold Council and Heraeus Metals highlight key drivers and projections for 2025.

World Gold Council: A Record Year for Gold

The World Gold Council credits gold’s 2024 success to central bank buying, geopolitical risks, and strong investor interest. While Chinese consumer demand slowed due to economic concerns, India’s robust growth and reduced import duties boosted demand. Central banks contributed 7% to 10% of total demand, reinforcing their importance in the market.

Economic and Geopolitical Drivers

Economic and geopolitical factors were central to gold’s performance. Inflation eased but stayed above target, prompting central banks in the US and Europe to cut interest rates, enhancing gold’s appeal. Concerns over European sovereign debt and instability in regions like South Korea and Syria also drove demand. Looking to 2025, central bank purchases are expected to remain strong, although competition from other assets and potential higher interest rates could pose challenges.

Asia’s Role in Sustaining Demand

China and India play critical roles in the global gold market. While Chinese consumer demand was subdued in 2024, government stimulus measures could revive the market in 2025. India’s demand, supported by economic growth and reduced import duties, positioned it as a key driver of global gold demand. These markets are expected to remain vital to sustaining demand.

2025 Outlook: Opportunities and Risks

Projections for 2025 suggest a mixed outlook. Inflation is expected to ease further, and rate cuts could continue to support gold prices. Gold’s performance will depend on four key drivers: economic expansion, risk, opportunity cost, and momentum. While rising interest rates could challenge its appeal, strong central bank demand and geopolitical instability are likely to provide support.

Heraeus Precious Metals: Sustaining Momentum

Heraeus Metals highlights central bank buying and renewed ETF inflows as critical to gold’s 2024 gains. ETF investors added 95 tonnes of gold in the third quarter, reversing a long trend of net sales. These trends are expected to continue into 2025, supported by geopolitical risks and inflation concerns.

Inflation and Policy Implications

Inflation remains a concern for 2025. President Trump’s return to office, coupled with proposed tax cuts and trade tariffs, increases the risk of renewed inflation. With the US facing growing deficits, inflation could be used to manage debt levels. In this environment, gold’s role as a hedge against inflation and currency devaluation remains critical. Heraeus Metals projects gold prices to range between $2,450 and $2,950 per ounce in 2025, with rate cuts likely weakening the dollar and boosting gold.

Jewelry Demand: Key Market Trends

Jewelry demand was resilient in 2024, particularly in India, where economic growth and cultural factors supported purchases despite high prices. In China, demand declined due to economic challenges. The outlook for 2025 remains uncertain, with recovery in China contingent on stimulus measures. India’s market is expected to remain a cornerstone of global jewelry demand.

Central Banks: Key Drivers of Stability

Central banks have been net buyers of gold for nearly 15 years, driven by its stability and long-term value. In 2024, their purchases accounted for a significant share of global demand. Factors such as interest rates, inflation, and geopolitical risks are expected to sustain strong central bank demand into 2025, underscoring gold’s strategic importance.

Conclusion: Gold’s Enduring Value

Gold’s performance in 2024 highlights its resilience as a hedge and store of value. With central banks, investors, and consumers driving demand, gold remains a cornerstone of the financial system as the world navigates the complexities of 2025.