Market Insight

Gold Outlook to Q4 2025: As good as

gold

January 2025

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Gold Outlook to Q4 2025: As good as gold

Gold is synonymous with the best. Think about a gold medal at the Olympics or the phrase “as
good as gold”. This reputation for excellence extends to its market performance, as
demonstrated by its stellar run in recent years. In 2024, it was the best-performing metal,
outpacing all other precious and base metals with a remarkable gain of 27%. Now, in 2025, gold
is already off to a strong start.
Gold hit a fresh high at the end of October 2024, reaching $2,777.8/oz (LBMA1 PM price on 30
October 2024), and came within a whisker of that level again in January 2025. Although gold
hasn't yet reached its all-time inflation-adjusted high from 1980 (Figure 1), the gap has narrowed
significantly to just 22%—the closest it has been in 40 years.
This impressive performance reflects a combination of factors, including economic uncertainty,
inflation concerns, and central bank policies, which have driven demand for gold as a safe-
haven asset. With such momentum, will 2025 be another record-setting year for gold?

Figure 1: Gold in nominal and real terms

3000 8

7
2500

Index = 1 in 1947
2000
5
US$/oz

1500 4

3
1000

500
1

0 0
1965

1971

1995
1947
1950
1953
1956
1959
1962

1968

1974
1977
1980
1983
1986
1989
1992

1998
2001
2004
2007
2010
2013
2016
2019
2022

Nominal price (left) Real price

Source: WisdomTree, Bloomberg. Nominal is LBMA PM fixing. Real deflated by US CPI index. January 1947 to
January 2025. Gold data daily. CPI data monthly. Historical performance is not an indication of future
performance and any investments may go down in value.

1. ‘LBMA’ stands for London Bullion Market Association.

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Gold Outlook to Q4 2025: As good as gold

Gold has rallied significantly at the start of 2025, despite facing headwinds from bond markets
and a strong dollar. The precious metal appears to be gaining strength from heightened
geopolitical and economic uncertainty. With a new White House administration in the US, the
global status quo has shifted, reinforcing gold's role as a haven in times of instability.
In WisdomTree’s model framework, speculative positioning (our measure of sentiment towards
gold) has emerged as the biggest driver of gold prices over the past year (Figure 2). Between
August and October 2024, easing bond yields and a depreciating dollar provided support for
gold. However, by November 2024, these tailwinds turned into headwinds, further complicating
gold's trajectory.

Figure 2: Gold price attribution

50
40
30
20
10
0
% y-o-y

-10
-20
-30
-40
-50
Dec 19

Dec 20

Dec 21

Dec 22

Dec 23

Dec 24
Mar 19

Mar 20

Mar 21

Mar 22

Mar 23

Mar 24
Jun 24
Jun 19

Jun 20

Jun 21

Jun 22

Jun 23
Sep 19

Sep 20

Sep 21

Sep 22

Sep 23

Speculative positioning Treasury yields Inflation Sep 24

Dollar basket Constant Fitted gold price

Actual gold price

Source: Bloomberg, WisdomTree price model, data as of January 2025. Speculative positioning is net non-
commercial positioning in gold futures markets (i.e. netting shorts away from long positions as reported by the
Commodity Futures Trading Commission). Treasury yields is the nominal yield to maturity on a 10-year US Treasury
Bond. Inflation is the annual growth of the US Consumer Price Index. Dollar Basket (DXY) is a measure of the value
of the US Dollar against a basket of currencies (Euro, Swiss franc, Japanese Yen, Canadian Dollar, British Pound and
Swedish krona). Actual gold price is the annual growth in spot gold prices. The fitted gold price is the price the
model would have forecast. The constant does not have economic meaning but is used in econometric modelling to
capture other terms. It can be thought of as how much gold prices would change if all other variables are set to zero
(although that would be unrealistic). Forecasts are not an indicator of future performance and any investments
are subject to risks and uncertainties.

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Gold Outlook to Q4 2025: As good as gold

Our model indicates a fair value for gold at the end of January 2025 of approximately $2,370/oz,
representing a 15% year-on-year gain. However, gold prices rose nearly 33% year-on-year to
$2,740/oz by the end of January, significantly exceeding this fair value. This suggests potential
for a pullback. The additional strength in gold may reflect strong sentiment towards the asset,
which is not fully captured by the speculative positioning indicator.
Heightened geopolitical risks arise from a shifting world order, where policy dynamics may
change abruptly following the inauguration of Donald Trump as President. Trump has
threatened Russian President Putin with another round of sanctions, and it is widely expected
that sanctions on Iran will be strictly enforced. In his first week in office, Trump has adopted a
confrontational stance towards several countries, including Denmark (Greenland) 2, Colombia3,
Canada, Mexico and China4. While many view his actions as strategic bargaining, the risk of
sabre-rattling escalating into an actual trade war cannot be ignored.

Figure 3: Gold and geopolitics

60% 550

50% 500
450
40%
400

Geopolitical Risk Index

30%
350
Gold price (y-o-y, %)

20% 300

10% 250
200
0%
150
-10%
100
-20% 50
-30% 0
1989
1986
1987
1988
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024

Gold price (left) Geopolitical risk (right)

Source: Dario Caldara and Matteo Iacoviello’s Geopolitical Risk Index based on a tally of newspaper articles
covering geopolitical (war) tensions, Bloomberg, WisdomTree. January 1985 – January 2025. Historical
performance is not an indication of future performance and any investments may go down in value.

Net speculative positioning in gold futures clearly reflects this strength in gold sentiment.
Positioning in gold futures is back to the levels we saw in October 2024 (Figure 4).

2. https://www.ft.com/content/ace02a6f-3307-43f8-aac3-16b6646b60f6
3. https://www.reuters.com/world/americas/colombias-petro-will-not-allow-us-planes-return-migrants-2025-01-
26/
4. https://www.ft.com/content/77b2bd4f-4b2e-4b03-9668-5e3bb5c9c37f

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Gold Outlook to Q4 2025: As good as gold

Figure 4: Net speculative positioning in gold futures

500000

400000

300000
Contracts

200000

100000

-100000

-200000

2021
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020

2022
2023
2024
Source: WisdomTree, Bloomberg. Weekly data from March 1995 to January 2025. Historical performance is not an
indication of future performance and any investments may go down in value.

A repricing of US interest rate expectations for 2025 has seen bond yields rise (Figure 5) and the
US dollar appreciate (Figure 6). We would normally think of these as big headwinds for gold but,
as we saw in 2023 and 2024, the yellow metal has been able to defy those pressures.

Figure 5: Gold and US Treasury Inflation Protected Securities

3000 -1.5

-1
2500
-0.5

2000 0
%, Inverted Axis

0.5
$/oz

1500
1

1000 1.5

2
500
2.5

0 3
Apr 19

Oct 19

Apr 20

Oct 20

Apr 21

Oct 21

Apr 22

Oct 22

Apr 23

Oct 23

Apr 24

Oct 24
Jul 19

Jul 20

Jul 21

Jul 22

Jul 23

Jul 24
Jan 19

Jan 20

Jan 21

Jan 22

Jan 23

Jan 24

Jan 25

Gold (left) Real interest rate (right)

Source: WisdomTree, Bloomberg. January 2019 to January 2025. Daily data. Historical performance is not an
indication of future performance and any investments may go down in value.
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Gold Outlook to Q4 2025: As good as gold

Figure 6: Gold and US dollar basket

3000 85
2800
90
2600
2400 95

%, Inverted Axis
2200 100
$/oz

2000
1800 105

1600 110
1400
115
1200
1000 120
Oct 22 Jan 23 Apr 23 Jul 23 Oct 23 Jan 24 Apr 24 Jul 24 Oct 24 Jan 25
Gold (left) Dollar basket (right)

Source: WisdomTree, Bloomberg. October 2022 to January 2025. Daily data. Historical performance is not an
indication of future performance and any investments may go down in value.

Many analysts have attributed this year’s gold rallies to significant central bank buying activity.
According to the World Gold Council and Metals Focus, gold purchases in the first half of 2024
reached a record high for H1. However, buying notably slowed in Q3 2024 and may have
decelerated further in Q4 2024 (we await forecasts from the World Gold Council and Metals
Focus, but IMF IFS data indicates a slowdown).
China, the largest gold buyer in 2023, paused its purchases between May and October 2024. It is
possible that China scaled back its activity to avoid driving prices even higher. Despite this
reduction in buying from the People’s Bank of China (PBoC), gold still hit multiple new highs
throughout the year. With less than 6% of its foreign exchange reserves held in gold, China’s
allocation remains relatively low compared to other economic superpowers. Consequently, it is
expected that China will continue purchasing gold in significant volumes for years to come.

Figure 7: Central Bank demand for gold

1200

1000

800
Tonnes

600

400

200

0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
-200
Q1 Q2 Q3 Q4

Source: WisdomTree, World Gold Council, Q1 2010 to Q3 2024. Historical performance is not an indication of
future performance and any investments may go down in value.
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Gold Outlook to Q4 2025: As good as gold

Gold outlook using WisdomTree’s forecasts model

Using WisdomTree’s internal gold model5, we can produce gold forecasts that are consistent
with several macroeconomic scenarios. We note that assessments of the economy are especially
varied at the moment and market consensus is shifting quickly. Markets appear to be repricing
the pace and extent of Federal Reserve (Fed) rate cuts (that is, less of them and more distant).
Consensus
Our consensus scenario takes the Bloomberg Survey of Professional Economists average views
on inflation, US dollar and Treasury yield forecasts. Consensus is looking for inflation to initially
decline but rise again with yearend values above target, the dollar to depreciate slightly, and
bond yields to decline marginally. Consensus is based on Fed fund rates falling to 4.00% by the
end of the year from 4.50% in January 2025.
Without a consensus forecast on gold sentiment, we reduce speculative positioning to 200k,
from over 300k at the time of writing the outlook (January 2025). Given the geopolitical risks
mentioned earlier, the higher-than-average positioning seems appropriate. Gold is a highly
sought after asset in times of economic, financial, and geopolitical stress, and these triggers
could drive sentiment towards the metal even higher.
In the consensus case scenario, gold reaches US$3,070/oz by Q4 2025, clearly above the October
2024 high, although prices may moderate a little in coming months before we get there.
Bull case
In this scenario, inflation remains stuck at a higher setting, possibly due to trade or specific
commodity shocks. The Federal Reserve nevertheless continues its cutting cycle, possibly under
the pressure of a new Administration in the US. Meanwhile, a combination of elevated
geopolitical risks and fears of policy errors keeps sentiment towards gold higher (expressed in
speculative positioning).
In this scenario, gold could reach US$3,450/oz by Q4 2025.
Bear case
This scenario represents further reassessment of Fed policy, with the central bank not delivering
any more rate cuts. Policies adopted by the new Administration in the US may be seen as
inflationary by the Fed (but ultimately end up being disinflationary). In the bear scenario, bond
yields rise further to 5.60%. With other central banks around the world still cutting, the US dollar
appreciates. New tariffs implemented also strengthen the dollar. We also reduce net speculative
positioning in this scenario, with the assumption that some wars may end (although geopolitical
risks from trade policies may simmer in the background).
In this scenario, gold falls to $2,300/oz at the end of Q4 2025.

5. See our model described in Gold: how we value the precious metal,

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Gold Outlook to Q4 2025: As good as gold

Figure 8: WisdomTree gold price forecast

4000

3500

3000

2500
$/Troy ounce

2000

1500

1000

500

0
2018 2019 2020 2021 2022 2023 2024 2025
Actual Consensus Bull Bear

Source: WisdomTree Model Forecasts, Bloomberg Historical Data, data available as of January 2025. Forecasts are
not an indicator of future performance and any investments are subject to risks and uncertainties

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Gold Outlook to Q4 2025: As good as gold

Consensus Q1 2025 Q2 2025 Q3 2025 Q4 2025

Inflation forecast 2.5% 2.4% 2.7% 2.6%

Nominal 10-year yields

4.27% 4.20% 4.18% 4.16%
forecast
US$ exchange rate forecast
108.5 108.0 107.4 107.0
(DXY)
Speculative positioning
250,000 240,000 230,000 200,000
forecast

Gold price forecast US$2,700/oz US$2,690/oz US$2,900/oz US$3,070/oz

Source: WisdomTree. Bloomberg Survey of Professional Economists. January 2025. Forecasts are not an indicator
of future performance and any investments are subject to risks and uncertainties.

Bull Q1 2025 Q2 2025 Q3 2025 Q4 2025

Inflation forecast 2.8% 2.9% 3.2% 3.4%

Nominal 10-year yields

3.63% 3.57% 3.55% 3.54%
forecast
US$ exchange rate forecast
103 103 102 101
(DXY)
Speculative positioning
250,000 240,000 230,000 200,000
forecast

Gold price forecast US$2,780/oz US$3,000/oz US$3,200/oz US$3,450/oz

Source: WisdomTree. January 2025. Forecasts are not an indicator of future performance and any investments
are subject to risks and uncertainties.

Bear Q1 2025 Q2 2025 Q3 2025 Q4 2025

Inflation forecast 2.1% 1.8% 1.7% 1.6%

Nominal 10-year yields

4.60% 4.90% 5.20% 5.60%
forecast
US$ exchange rate forecast
113 112 112 113
(DXY)
Speculative positioning
150,000 100,000 50,000 50,000
forecast

Gold price forecast US$2,600/oz US$2,500/oz US$2,400/oz US$2,300/oz

Source: WisdomTree. January 2025. Forecasts are not an indicator of future performance and any investments
are subject to risks and uncertainties.

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