A troy ounce of gold could hit the $3,000 mark next year. Experts defended rising geopolitical tensions and central bank interest rate policies.
Pascal Michel/ch media
Gold prices are likely to continue their record run in the new year. At least that's the expectation from Germany's Heraeus Group, the world's leading precious metals trader. The company owns a gold refinery called Argor-Heraeus in the Swiss canton of Ticino.
In greater demand than ever: gold bars.Image source: sda
Experts expect the price of gold to be between $2,450 and $2,950 per troy ounce (31.1 grams) next year. If the value does reach the upper limit, this will be a new record. The previous high this year was $2,800 per troy ounce.
The expected rise is significant because gold started from a strong position. In light of this year's wars and crises, its demand as a safe haven is already great. Gold prices have risen to previously unimaginable levels – despite high interest rates and gold's virtual disadvantage as a non-interest-bearing investment.
Precious metals trader Heraeus's “bullish” forecast is based on the fact that the interest rate environment will change in favor of gold in the coming year: central banks believe that the fight against inflation has been won and may reduce interest rates. This doubles gold's appeal. First, it loses the barrier of being an interest-free investment because other investments also pay less interest. Second, when interest rates are lower, the dollar weakens. This makes the precious metal cheaper.
Experts cited other reasons for continued high demand. Central banks are likely to continue stockpiling gold reserves next year. Heraeus expects that, as in previous years, it will purchase approximately 1,000 tons. This is equivalent to one-fifth of global demand.
Finally, Donald Trump's election to the White House on January 20 may further push gold prices higher. His erratic policies could cause geopolitical tensions to worsen and gold to become even more sought after as a safe haven. In the Middle East in particular, the recent fall of longtime dictator Bashar al-Assad shows how quickly the balance of power can shift. An unpredictable U.S. president is not a pillar of stability—quite the opposite.
The election of Donald Trump also had an impact on gold prices.Image: trapezoid
Meanwhile, Republicans have made lofty campaign promises, such as massive tax cuts for the wealthy. He can only redeem this if he continues to pile up the already massive U.S. debt. Punitive tariffs announced by Trump could also increase inflation. Higher inflation typically pushes gold prices higher, as investors like the stable gold to protect themselves against inflation.
In comparison, silver's gains are likely to be greater, albeit at lower levels. Heraeus predicts that the price per ounce could climb to $40. The main driver is industrial demand. The Chinese photovoltaic industry, in particular, purchases large amounts of silver for its solar panels. Like gold, silver may also benefit from announced interest rate cuts. Furthermore, experts say it remains undervalued at the moment. “Silver tends to outperform gold during the latter stages of a bull market.” (aargauerzeitung.ch)
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