Gold sprints out of the gate as 2025 starts, setting fresh record highs on the way

• The extended rally reflects the extent and range of issues the world faces
• Strong upward price momentum was seen in the gold market in January with numerous factors in the driving seat, including fund, investment and central bank buying
• The fact gold prices have extended the rally despite the strong dollar, relatively strong US treasury yields and record high US equity markets, suggests there is a secular change underway in the gold market...
• ...investors are buying gold for the protection it offers from massive global debt, increased geopolitical tensions and a world that is becoming increasingly uncertain as such things as AI evolve
• China’s appetite for gold has been increasing as its economy, property, equity and bond markets are suffering, as is its currency
• The expansion of the BRIC countries and their interest in moving away from relying on the US dollar is another factor supporting gold

Silver has started to outperform gold in 2025, this despite a generally poor global industrial outlook

• Is silver attracting investment attention as its price is still a long way from the record high? 

PGM prices rise on the back of strength in silver and gold, but the outlook is subdued 

• PGMs expected to see stronger demand from the auto industry in 2025

Gold starts 2025 in a bullish mood as markets brace

After the strong performance in 2024, that saw gold set fresh record highs on 40 occasions, gold has started 2025 in a similar vein, with fresh highs set on January 30-31 and again in early February.

The all-time high has now reached $2,866.70 per oz, basis London spot prices, while the high on Comex April gold reached $2,893 per oz. While the uncertainty surrounding President Donald Trump’s second term has been a strong driver of demand for gold, so have many other factors.

These included periods of dollar weakness, a string of central bank interest rate cuts (ECB, Bank of Canada, Sweden’s Riksbank), strong fund and ETF buying, with reports of further central bank buying too. The reason why Chicago Mercantile Exchange (CME) prices are trading at such a premium to London prices seems to be rooted in fears that Trump may put more broad-based tariffs on imports, including precious metals, which could lead to liquidity issues for those with short futures positions on CME. All in all, it has been an interesting start to 2025, and there are many cross currents still swirling around the market, suggesting 2025 will be another active year for the gold market. 

CHART 1: Gold – Fund long short and net position on Comex

10 Feb 2025 | Categories: Gold, Silver, China, Dollar, US, Platinum, Palladium, UK

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