Key information
- Gold is expected to reach $2,900 per ounce in 2025, a 7 percent increase from current levels.
- The price of silver is expected to reach $38 per ounce, an increase of almost 30 percent from current values.
- Hansen forecasts significant gains for gold and silver due to their safe-haven role.
Diversified exposure to commodities is expected to thrive in 2025 as a hedge against inflation and economic instability. Gold and silver are expected to lead the sector’s performance.
While projecting an optimistic outlook for 2025, Ole Hansen, head of commodities strategy at Saxo Bank, advises investors to manage their commodity portfolios well. Gold and silver remain his top recommendations after their impressive runs in 2024. Hansen predicts the price of gold will reach $2,900 an ounce this year, representing a 7 percent increase from previous levels. current. He sees even greater potential in silver, predicting prices will rise as high as $38 an ounce, a jump of nearly 30 percent from current values. Hansen insists he foresees significant gains.
Market Outlook
Gold is expected to maintain its crucial safe-haven position throughout 2025. Investor interest in precious metals has been fueled by growing geopolitical uncertainties. Global tensions and economic upheaval have prompted investors to seek safe assets, a trend that shows no signs of abating. Concerns over rising global debt, particularly in the United States, are encouraging investors to use precious metals to hedge against possible economic instability. However, Hansen acknowledges that investors need to be patient as the Federal Reserve gradually shortens its easing cycle.
Dynamic
Current market projections point to only one rate cut this year, in stark contrast to expectations several months ago. The US central bank’s hawkish stance could support the US dollar, which could introduce volatility into the precious metals market. Despite these challenges, Hansen is more optimistic about silver due to its dual role as a monetary and industrial metal.
-By 2024, increased industrial demand has caused a physical shortage in the silver market. Sectors like electronics and renewable energy, particularly photovoltaic (solar) technologies, have contributed significantly to this surge. The anticipated persistence of industrial demand is likely to perpetuate a silver supply deficit in 2025, potentially intensified by an increase in “paper” demand through exchange-traded funds. As silver continues to outperform gold, Hansen predicts that the gold-to-silver ratio will decline to around 75 points from its current level of 88.
Commodity Outlook
Hansen’s bullish sentiment on silver aligns with his broader outlook on commodities. It identifies greater potential in metals critical to the electrification of the global economy compared to those dependent on construction. Among industrial metals, Hansen maintains a long-term bullish outlook on metals supporting the energy transition, particularly copper and aluminum. These metals are driven by investments in power grids and the rapid growth of renewable energy installations, encompassing electric vehicles, solar power and wind turbines. Conversely, he sees limited upside potential for metals that rely on demand from the construction sector, such as iron ore and steel.
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