3 reasons gold could hit all-time highs in early 2025

Gold prices are on track to reach historic levels in the first quarter of 2025, predicts the CEO of one of the world’s largest independent financial advisory and asset management organizations.

The bullish prediction from deVere Group’s Nigel Green is driven by a confluence of factors reshaping global markets.

He says: “As central banks continue aggressive buying, the US Federal Reserve cuts interest rates, and geopolitical tensions persist, the precious metal is primed for a bullish surge that could shatter previous records.”

Central banks around the world are accelerating their gold purchases at a pace not seen in decades. This trend, which initially gained momentum following the start of the Russia-Ukraine war, has broadened, with many countries shifting away from US dollar-denominated assets.

“Gold buying has now surged to nearly three times the level it was before 2022, and the outlook suggests continued strong demand into 2025,” notes the deVere CEO.

“This wave of buying is not just about portfolio diversification — it’s a strategic move to mitigate risks. Countries, especially those wary of US financial sanctions, are increasingly turning to gold to shield their reserves from political and economic pressures."

“China, for instance, has been a key player in this trend. In 2023, China’s central bank added to its gold holdings for 10 consecutive months, underscoring the nation’s intention to reduce its reliance on the dollar amidst growing geopolitical tensions with the West."

“This buying intensity continued well into 2024, with net purchases of 290 tonnes recorded in the first quarter of 2024 – the fourth strongest quarter of purchases since the buying streak began in 2022.”

Similarly, Turkey, Singapore, Brazil and India have also ramped up their gold reserves, driven by their need to safeguard against currency volatility and potential sanctions.

The US Federal Reserve’s shift from its aggressive interest rate hiking cycle toward rate cuts is another pivotal factor that will likely fuel a rally in gold.

“Higher interest rates make gold less attractive as it doesn’t generate yield. However, with rates poised to fall, the tables are turning. Lower rates can often reduce the appeal of yield-bearing assets, drawing some investors – both retail and institutional – back into the gold market.”

In today’s fragile global landscape, gold’s role as a portfolio hedge remains as vital as ever. The potential for geopolitical shocks—including escalating trade wars, sanctions, and heightened global tensions—continues to loom large.

“Gold offers unparalleled protection in such scenarios, especially as concerns grow around issues such as Fed independence, global debt sustainability, and financial sanctions,” affirms Nigel Green.

“One scenario that could send gold prices soaring is an escalation in financial sanctions comparable to the surge seen since 2021. Another potential trigger could be worsening debt fears in the US.”

He concludes, “Against this backdrop, and should the current momentum be maintained, we could see new all-time price highs for gold in the first quarter of 2025.”

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