Trump and Putin drive up gold prices

An ounce of gold could approach the $3,000 mark next year. Experts explain this surge by geopolitical tensions and central bank decisions on interest rates.

Pascal Michel / ch media

The price of gold is expected to break records again next year. In any case, this is what the German Heraeus group, one of the world leaders in precious metals trading, is planning. He is the one who owns the Argor-Heraeus gold refinery in Ticino.

Experts expect the price per ounce (31.1 grams) to range between $2,450 and $2,950. At the top of this range, we would even break a record. In 2024, we recorded a ceiling of 2800 dollars per ounce.

This is worth paying attention to because gold has a very solid foundation. As a safe haven, its demand has intensified this year in the face of war and crises. The price has reached previously unimaginable levels – despite high interest rates. And also despite the fact that gold had the disadvantage of being an interest-free investment.

The dollar will weaken

Heraeus’ “strong” forecast is also based on a favorable transformation of the interest rate environment in 2025: central banks consider they have fought inflation and will probably lower rates. This will make gold doubly attractive. First, it will no longer represent the only interest-free investment, because other investments will also yield less. Second, the dollar will weaken, making the precious metal more affordable.

Experts put forward other reasons to explain the persistence of strong demand. Central banks should continue to build up substantial gold reserves. Heraeus expects them to purchase around 1000 tonneslike previous years. Or a fifth of global demand.

The return of Donald Trump to the White House on January 20 will also have an impact. The Republican’s haphazard policies could exacerbate geopolitical tensions and strengthen demand for gold as a safe haven. In the Middle East in particular, the fall of Bashar al-Assad showed how quickly the balance of power can change. In this context, an American president who is not very predictable is not a guarantee of stability, quite the contrary.

At the same time, Trump made ambitious election promises, such as massive tax cuts for the rich. He will only be able to maintain it by further deepening an already colossal public debt. Its announced punitive customs duties could also increase inflation. An increase which in principle contributes to increasing the price of gold, because investors like to protect themselves with something stable.

Likewise, although at a relatively lower level, silver could experience an even more marked rise. According to Heraeus’ predictions, the price of an ounce could reach 40 dollars. Main driver: industry demand. Chinese photovoltaics, in particular, buy money en masse for its solar panels. Like gold, silver should benefit from the announced drop in interest rates. In addition, its level remains underestimated for the moment, according to experts. “In future phases of bull markets, silver may tend to outperform gold.”

(Translated and adapted by Valentine Zenker)