Gold prices, which surged to record highs in 2024, are showing signs of cooling, offering a respite for prospective buyers and investors. Analysts have revised their bullish forecasts, delaying the anticipated $3,000-per-ounce milestone from the end of 2025 to mid-2026, citing slower-than-expected monetary easing by the U.S. Federal Reserve.
Goldman Sachs, which previously projected $3,000 gold by late 2025, now predicts a peak of $2,910 per ounce in the fourth quarter of that year. The adjustment reflects expectations of fewer interest rate cuts this year—only one or two compared to earlier predictions of three to four. Slower monetary easing is expected to temper demand for gold-backed exchange-traded funds (ETFs), though steady central bank purchases remain a strong long-term driver.
Adding to the cooling momentum is the recent discovery of 11,000 tonnes of gold in China’s Hunan province, valued at $83 billion. This marks one of the largest gold finds in history. While the discovery could reduce China’s reliance on imports from nations like Australia and South Africa, experts suggest its immediate impact on global supply-demand dynamics will be limited.
Gold Prices: Recent Trends
Gold surged over 30% in 2024, hitting an all-time high of $2,748.23 per ounce in October. As of Tuesday, prices eased to $2,664.40 per ounce. In Dubai’s Gold Souk, the price of 22k gold jewellery stands at Dh296.75, up from Dh227.25 a year ago.
“Softening gold prices are a welcome relief for consumers,” said U. Nagaraja Rau, director of Bhima Jewellers. “Consistent price increases have boosted customer confidence in gold as an investment.”
China’s Discovery and Global Implications
China, the world’s largest gold producer and consumer, accounts for 10% of global gold supply. The Hunan discovery reinforces its dominant position. Chinese consumption reached 630 tonnes in 2023, a 10% year-on-year increase. Analysts believe the find may stabilize local markets and provide short-term moderation in global gold prices, potentially benefiting major importers like India.
Central Banks and Global Demand
Central banks worldwide, including India’s Reserve Bank, are expected to capitalize on any price dips to bolster gold reserves. The World Gold Council (WGC) predicts modest growth for gold in 2025, supported by central bank purchases and ETF interest.
Broader Economic Impact
Analysts also noted uncertainty surrounding the incoming Trump administration’s policies, which could influence bond yields, the dollar, and, indirectly, gold prices. While Trump’s “America-First” policies may create challenges for gold, heightened trade tensions could renew speculative interest in the metal.
Despite recent headwinds, easing prices and new discoveries present opportunities for buyers and investors, with analysts emphasizing gold’s enduring appeal as a safe-haven asset.
