Gold prices are poised to reach new record highs in 2025, fueled by investor demand for safe-haven assets amid anticipated equity market volatility, according to a recent report by UBS.

2024 Recap: A Historic Year for Gold

1. Record Performance

   • Gold surged 27% in 2024, hitting an all-time high of $2,788 per ounce in October.
   • The annual average price of $2,389 per ounce marked its strongest yearly performance since 2020.

2. Post-Election Volatility

   • Despite a brief sell-off as investors shifted to riskier assets following Donald Trump's election victory, gold retained its status as a reliable hedge against uncertainty.

Key Factors Shaping Gold Prices in 2025

1. Stronger Dollar and Rising Yields

   • The U.S. dollar's strength and elevated Treasury yields are expected to weigh on gold in early 2025.
   • A stronger dollar makes gold more expensive for international buyers, while rising yields reduce the appeal of non-yielding assets like gold.

2. Federal Reserve Policy

   • Expectations for Federal Reserve rate cuts have been tempered by robust economic data and Trump's tariff plans, which could sustain inflationary pressures.

3. Volatility in Equity Markets

   • High stock market valuations and concentrated portfolios across sectors and geographies are likely to heighten stock market volatility.
   • These conditions could drive more investors toward gold as a portfolio diversifier.

Gold's Role as a Hedge Against Inflation

• UBS analysts believe that inflation-hedging demand will outweigh headwinds from a stronger dollar and rising yields.
• Historical trends demonstrate that gold performs well during periods of inflationary pressures and economic uncertainty.

Forecast: Record Highs on the Horizon

• UBS anticipates gold breaking its 2024 record and establishing a new all-time high in 2025.
• The metal's appeal as a safe-haven asset and diversifier makes it a cornerstone for portfolios navigating market turbulence.

Actionable Insights

For investors seeking to monitor gold's performance and assess market dynamics:

• Leverage the Commodities Price API to analyze trends in commodity sectors over time.