GuShiio.com ① Gold prices hit new highs 40 times in 2024, and have increased by 10% since the beginning of 2025. The recent sharp rise in gold prices is mainly driven by risk aversion factors, especially Trump’s policies, which have exacerbated market uncertainty.
② Experts from the World Gold Council said that for ordinary investors, there are three difficulties in gold investment: difficult decision-making, difficult timing and difficult holding.
Financial Union, February 10 (Reporter Wang Hong)Spot gold in London broke through US$2900/ounce today, hitting another record high, rising nearly 1.5% during the day. Gold prices hit new highs 40 times in 2024 and have risen by 10% so far since the beginning of 2025. Experts pointed out that the recent sharp rise in gold prices is mainly driven by risk-averse factors, especially Trump’s policies, which have intensified market uncertainty.
Although the price hit a new high, institutions are still optimistic about the future trend of gold prices. UBS today raised its gold price forecast for the next 12 months to US$3000 per ounce. The analysis pointed out that the Federal Reserve is still on the path of cutting interest rates, strong demand from global central banks and “de-dollarization” are all factors supporting gold prices. Experts also pointed out that ordinary investors have the “three difficulties” when allocating gold: difficulty in making decisions, difficulty in timing and difficulty in holding.
Safe haven demand drives gold prices to exceed $2,900
“Trump’s request to cut interest rates and intensify protectionist policies have increased global economic and financial risks and pushed funds to gold for safe haven. Simply put, the uncertainty of Trump’s policies has stimulated the rise of gold prices,”said Zhao Qingming, deputy director of the Institute of Integrated Information.
This round of gold bull market began in October 2022. Since 2024, the price of gold has accelerated, with an annual increase of 26.6%, the highest increase in nearly 14 years. After entering 2025, gold continues to rise. Especially since the end of January, the price of gold has continued to break through historical highs, and today it has set a historical record of US$2900.
When analyzing the reasons for the recent sharp rise in gold prices, Wen Bin, chief economist of Minsheng Bank, said that risk aversion is the main reason for the recent sharp rise in gold prices, especially Trump’s tariff policy that has exacerbated market uncertainty; due to the bias of the FOMC meeting and the impact of lower-than-expected U.S. GDP data, the real U.S. bond yields have fallen, which has also pushed up the price of gold; in addition, public opinion’s attention to “de-dollarization” may also amplify the increase in gold prices.
Reporters from the Financial News Agency also noticed that the driving factor of “de-dollarization” has also received more attention. Zhang Yu, an analyst at Huachuang Securities, said that an important factor driving the continued rise in gold prices is the restructuring of the global order. The logic behind it is that when the global order is restructured, the old order is gradually weakening, the new order is emerging, and the game between the two sides is still unclear, gold is often the better choice. This rule has been fulfilled in the changes of great powers in the past 200 years, including the change of the Netherlands and the United Kingdom, and the change of the United Kingdom and the United States.
The special period of the New Year has also boosted consumer demand for gold. “New Year holidays in China, India and other countries are generally the peak season for gold consumption, which will increase market demand for gold and push up the price of gold. Among them, the Spring Festival in China, as a traditional peak consumption season, will push up demand for gold. At the same time, the value-added value preservation and decorative attributes of gold jewelry have also attracted more young consumer groups, which in turn drives up the price of gold,”said Qu Rui, deputy director of the Research and Development Department of Dongfang Jincheng.
Institutions look at gold prices towards US$3000, and global central bank demand remains dominant
UBS today raised its gold price forecast for the next 12 months to US$3000 per ounce and said gold will continue to be supported throughout the year amid increased uncertainty, an extended global interest rate cut cycle and strong demand from investors and central banks.
World Gold Council data shows that in 2024, the total amount of gold purchased by global central banks will reach 1045 tons, especially in the fourth quarter, global central bank purchases will increase significantly to 333 tons.
UBS pointed out that total global gold demand in the fourth quarter of 2024 reached 1277 metric tons, an increase of nearly 12% compared with the same period in 2023. Among them, the central bank’s strong buying in those three months brought the full-year purchase volume to 1045 metric tons, which was the same as the previous two years and twice the average level of approximately 500 metric tons between 2011 and 2021. Diversification and de-dollarization trends are expected to keep central bank demand strong in coming years. In addition, the widening U.S. federal deficit and worsening long-term debt position should also support gold’s attractiveness relative to the U.S. dollar.
“In 2025, it is expected that the global central bank’s gold purchase demand will continue to dominate,” said Louise Street, senior market analyst at the World Gold Council.
Faced with record-breaking gold prices, what difficulties do ordinary investors have when allocating gold? Wang Lixin said that for ordinary investors, there are three difficulties in investing in gold: decision-making, timing and holding.
“After the gold price hit a new high, the biggest challenge is whether investment psychology and investment can be stabilized. Although global dollar-denominated gold has risen by more than 25% in the past year, exceeding the return of most mainstream financial assets, there may not be many investors who can actually enjoy the rise. Investors can also easily fall into the misunderstanding that it is difficult to hold. If the price of gold rises slightly, there will be profit-taking behavior, which is actually an ultra-short-term behavior. Although gold is often considered a hedge of risky assets, many investors actually adopt a long-term investment philosophy, which is also a contradiction.” Wang Lixin pointed out.
