Remaining period in 2025 Gold Price Trend: Will the Upward Trend Continue?

Gold prices have been steadily trending upward since last year, and as global economic uncertainties and geopolitical tensions intensify, this year also continues to see strong growth. Consequently, more investors are turning their attention to gold investments. So, what direction will the gold market take in 2025? This article provides a comprehensive overview of the current gold price status, the key factors driving price fluctuations, and market outlooks until the end of the year.

Current State of the Gold Market

Domestic and International Gold Price Status

As of July 5th, a clear upward trend is observed when comparing domestic and international gold prices. In the domestic market, based on the Korea Gold Exchange, 1 don(3.75g) is priced at 635,000 KRW, which is approximately a 43% increase from 443,000 KRW in the same period last year.

In the international spot market, gold is traded at about $3,337.04(XAU/USD) per ounce. This represents an increase of approximately 27% since the beginning of the year and about 39% compared to one year ago. Achieving this level of growth within just three months is quite remarkable. Although the pace of increase has recently slowed, there are no clear signals of a sharp decline yet.

Chart Trend Analysis

The monthly trend chart from the Korea Gold Exchange shows a nearly consistent upward movement until May. This indicates a mid-term bullish trend rather than a short-term fluctuation. However, since May, the pace of increase has become somewhat more gradual, suggesting a possible technical correction phase.

Major Variables Influencing Gold Prices

Given the high correlation between domestic gold prices and international gold prices(XAU/USD), understanding the influencing factors on a global scale is crucial.

1. Weakening of the US Dollar Hegemony

Several countries are implementing policies to reduce dependence on the US dollar in international trade and finance. China is expanding the use of the yuan globally and establishing currency swap agreements to decrease reliance on the dollar, while India is increasing the use of the rupee in trade settlements.

Countries under international sanctions, such as Russia and Iran, are also avoiding the dollar and reallocating assets into other currencies or gold. These movements can increase demand for gold and drive up prices.

2. Increase in Geopolitical Risks

Gold is a traditional safe-haven asset, and demand tends to rise when international stability is threatened. During the 2008 global financial crisis, gold prices surged sharply, as they did during the European debt crisis in 2011. In 2020, during the COVID-19 pandemic, prices hit record highs.

Recent conflicts such as US-China trade tensions, the Russia-Ukraine war, and Middle Eastern disputes are risk factors that could directly impact the global economy, providing a significant backdrop for the current strong demand for gold.

3. Weak Economic Signals in Developed Countries

Rising inflation in the US and slowing growth in Europe increase economic uncertainty. Investors tend to choose gold as a hedge against inflation and a means of asset protection, which exerts upward pressure on prices.

4. Interest Rate Cut Cycle

When central banks lower benchmark interest rates, yields on deposits and bonds decrease, reducing the opportunity cost of investing in gold. Additionally, rate cuts are often interpreted as signals of economic weakness, prompting capital flows into safe assets.

As seen after the Fed’s 50bp rate cut in September last year, which led to a significant rise in gold prices, further rate reductions could push gold prices even higher.

Gold Price Outlook for 2025

Diverging Expert Opinions

Forecasts from international financial institutions vary.

Bullish Scenario: JP Morgan’s latest report in July projects a target of $3,675 per ounce by 2025. Given that current prices already exceed $3,300, and considering there are about five months until the end of the year, this target is quite feasible. At the beginning of the year, Goldman Sachs and Citi Group set a target of $3,000, which has already been surpassed.

Bearish Scenario: Barclays and Macquarie have set a year-end target of $2,500 per ounce. This implies about a 25% decline from current levels, which is less likely considering the structural demand factors.

Market Development Possibilities

Overall, the likelihood is high that gold prices will maintain a strong upward trend into 2025. However, some experts suggest that technical corrections may occur in the second half of the year, so appropriate risk management strategies are recommended for investors.