Gold Market Insights

Wall Street analysts expect gold’s rally to continue in 2025 after the precious metal experienced its largest annual increase in 14 years.

Despite a brief pause following Donald Trump’s election in November, gold closed 2024 with a remarkable 27% gain, outperforming the S&P 500’s 23% rise. Analysts now predict that gold’s upward momentum will persist into 2025.

For the third consecutive year, JPMorgan analysts project a bullish outlook for gold, forecasting it to reach $3,000 per ounce. They cite its value as a hedge against macroeconomic uncertainty during the Trump administration. Similarly, Goldman Sachs anticipates gold hitting $3,000 by the end of 2025—or even $3,050 if emerging markets’ central banks accelerate their bullion purchases. However, if the Federal Reserve limits itself to just one additional rate cut, prices might cap at $2,900.

Persistent inflation remains a significant concern, raising doubts about how swiftly the Federal Reserve can reduce borrowing costs. Certain Trump administration policies, such as elevated tariffs, may further exacerbate inflationary pressures.

Experts believe additional rate cuts could attract more retail investors to gold as a means of wealth preservation. Steven Feldman, CEO of GBI, suggests that a combination of rate reductions, inflation, or stagflation could spur significant investment flows from U.S. retail investors, providing additional support for the gold market.

Wall Street analysts widely agree that gold’s rally will continue through 2025, bolstered by its largest annual increase in 14 years.

Watch, Read, Listen

To understand the pricing of gold, it’s important to differentiate between a few key concepts, particularly the spot price, futures price, and premium.

  1. Spot Price: The spot price of gold is the current price at which gold can be purchased for immediate delivery. This price represents the most up-to-date cash value of gold for physical delivery, often set by well-known sites like Kitco, APMEX, or other major bullion dealers. The spot price fluctuates based on global supply and demand, and it’s typically used as the baseline or “standard” for quoting gold prices.
  2. Futures Price: Futures prices differ slightly from the spot price as they are associated with contracts for future delivery. These contracts are actively traded on exchanges like COMEX, where the futures price of gold is determined by the contract with the highest open interest (meaning the highest volume of outstanding orders). Futures prices can influence spot prices and are crucial for understanding market sentiment about where prices might head, but they are not the price one pays for immediate, physical gold.
  3. Premium: When purchasing physical gold, such as coins or bars, most buyers pay a premium over the spot price. This premium is the additional cost, usually a percentage above spot, that reflects manufacturing, distribution, and profit margins. For example, if the spot price of gold is $1,800 per ounce, and a dealer adds a 5% premium, a buyer would pay $1,890 per ounce. Premiums can vary significantly depending on the type of gold product and the dealer.

Example of Buying Gold: If you’re purchasing gold coins from APMEX, the price you see on the day of purchase will include both the spot price and any additional premium. APMEX and similar sellers help illustrate the cost you would actually pay, beyond just the raw market value.

In summary:

This layered structure helps buyers understand the overall cost and factors involved in gold pricing