Press Release
World Gold Council Shares 2025 Gold Outlook,
Highlighting Interest Rates and Geopolitics as Key Drivers of Global Demand.
Gold hit a record 24-Year high in 2024 with an impressive 25.5% growth rate that outperformed all other major asset classes
Bangkok, 27 January 2025 – The World Gold Council (WGC) has released its analysis for 2025 outlook, emphasising that interest rates, economic uncertainty, and geopolitical factors will play a significant role driving gold demand in 2025. This comes after gold emerged as a standout performing asset in 2024, achieving its best annual growth performance in 24 years. Notably, Thailand emerged as one of the most resilient consumer gold demands among ASEAN countries in 2024.
Gold performed exceptionally well in 2024, rising by 25.5% and outperforming all major asset classes, likely due to its role as an effective hedge against the heightened geopolitical uncertainty and market volatility. Over the course of last year, the LBMA Gold Price PM set 40 new all-time highs (ATH), the most recent of which was US$2,777.80/oz on 30 October.
Mr. Shaokai Fan, Head of Asia-Pacific (ex-China) & Global Head of Central Banks at the World Gold Council, commented “Central bank and investor buying have more than offset a notable deceleration in consumer demand. Asian investors have been a near constant presence, while lower yields and a weakening US dollar in Q3 fuelled Western investment flows. However, it is gold’s role as a hedge amidst rising market volatility and geopolitical risk that most likely explains its remarkable performance.”
Market consensus suggests rangebound performance for gold in 2025
Market consensus expectations suggest that the US Federal Reserve will deliver 100 bps in cuts by the year end 2025, with inflation softening but still above target. European central banks will also likely cut rates by a similar amount. This possibly suggests a more modest performance for gold this year, but with the potential for upside catalysts as the year unfolds. Trump’s second term may provide a boost to the local Thai economy but has also elicited a fair degree of nervousness for investors around the world.
In this context, the actions of the Fed and US dollar volatility will continue to be important drivers for gold. But as the past few years have shown, these are not the only factors that determine gold’s performance. The WCG instead relies on a more robust framework that allows it to capture the contribution of all sectors of gold demand and supply. Based on the QaurumSM model, WCG believes if the global economy performs according to consensus in 2025 gold may trade in a similar range as the end of last year, with the potential for some upside
Consumer Gold Demand in Thailand Surged during 2024
The WGC also noted Thailand’s remarkable resilience in overall consumer gold demand during 2024. Gold continues to develop as the asset of choice for Thai investors during economic and political uncertainty in Thailand.
“We found that Thai investors view gold both as a means of value protection and for long-term returns, as bar and coin investment in Thailand remains particularly robust. In contrast to a 9% global decline, Thailand’s consumer bar and coin demand grew by 15% year-on-year in Q3 2024. Thailand was also ASEAN’s largest buyer of bars and coins in Q3 2024, ” Shaokai Fan, added.
Inflation and risks could drive demand for gold.
A more business-friendly fiscal policy combined with President Trumps America-first agenda is likely to improve sentiment among domestic investors and consumers. This will likely favour risk-on trades in the first few months of the year. The question, however, is whether these policies will also result in inflationary pressures and disruptions to supply chains. In addition, concerns about European sovereign debt are once again mounting, not to mention continued geopolitical instability, particularly in light of the events in South Korea and Syria in December 2024. The WGC believes this could prompt investors to look for hedges, such as gold, to counter risk.
Central banks continue as net buyers
Central banks have been net buyers for almost 15 years 1[1]. While central bank demand will likely end the year below previous records, it has remained strong, positively contributing to gold’s performance to the tune of 7%–10%.[2]
Equally, central banks will remain an important part of the puzzle. Central bank buying is policy driven and thus difficult to forecast, but our surveys and analysis suggest that the current trend will remain in place. The WGC sees demand in excess of 500 tonnes (the approximate long-term trend) should still have a net positive effect on performance. It believes central bank demand in 2025 will surpass that, but deceleration below that level could place additional pressures on gold.
Conclusion
WGC’s analysis, based on QaurumSM, suggests that Gold is likely to remain rangebound if existing market expectations are correct. However, a combination of higher rates and lower economic growth could negatively affect investors and consumers. This could be particularly evident in Asia. Conversely, significantly lower interest rates, or a deterioration in geopolitics or market conditions will improve gold’s performance. The central bank demand will continue to provide a boost to gold, if it remains at a healthy level. Gold’s final price performance will depend on the interaction of gold’s four key drivers: economic expansion; risk; opportunity cost; and momentum.
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For further information please contact:
Maetavarin Maneekulpan, TQPR Thailand, T:02 260 5820 E: mae@tqpr.com
World Gold Council
We are a membership organisation that champions the role gold plays as a strategic asset, shaping the future of a responsible and accessible gold supply chain. Our team of experts builds understanding of the use case and possibilities of gold through trusted research, analysis, commentary, and insights. We drive industry progress, shaping policy and setting the standards for a perpetual and sustainable gold market.
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- Central banks turned from net sellers to net buyers in the second quarter of 2009. However, it was not until 2010 that annual demand became consistently net positive. ↑
- Our analysis, based on QaurumSM, suggests that, holding everything else constant, a net 30 tonne increase translated to approximately a 1% rise in the gold price. When considering the balancing effects of other sectors, we estimate that the additional demand for gold this year – which will likely be close to 300 tonnes above the long-term average – would imply an additional 7%–10% increase in price performance.
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