Gold prices surged in 2024, rising 26 percent, narrowly beating the S&P 500’s return of 25 percent and leaving investors wondering if there’s more room to run or if it’s time to sell. The arrival of President Donald Trump’s second term also brings questions about the impact of tariffs on inflation and how investors can protect themselves from geopolitical risks.
Here’s what analysts say about where gold may be headed from here.
Gold prices headed higher still, analysts say
Investors are typically drawn to gold because of its diversification benefits and track record of being a hedge against inflation. Gold prices often rise during periods of economic turmoil, such as during the 2008 financial crisis or the collapse of Silicon Valley Bank in 2023.
As Trump’s second term gets underway, investors are focused on how tariffs will impact the rate of inflation, which has been declining and sat at 2.9 percent in December, according to the latest data from the U.S. Bureau of Labor Statistics. Geopolitical risks are also a focus, with Trump’s willingness to target countries he perceives as taking advantage of the U.S.
“Gold rallied to new all-time highs in 2024, and we see a strong case for a continued gold rush in 2025,” J.P. Morgan analysts wrote in their 2025 outlook. “The commodity can play an important role in building resilient portfolios.”
One recent source of demand for gold has been central banks looking to shift their reserves away from the U.S. dollar, after the U.S. froze the assets of Russia’s central bank following the 2022 invasion of Ukraine.
“We don’t see central bank demand slowing down,” Lina Thomas, commodities strategist at Goldman Sachs Research said in a report. “And with the Fed cutting rates, investors are jumping back in, too.” Thomas expects gold to reach $3,000 per ounce by the end of 2025.
Gold could also benefit if conflicts around the world continue to increase, according to CFRA analyst Matthew Miller.
“In our opinion, gold will perform well in the current environment as real interest rates decline, government deficits increase, fiat currency debasement continues, and geopolitical conflicts flare-up around the world,” Miller wrote in a recent note to clients.
How to invest in gold
Investors who are interested in investing in gold have a few options when it comes to betting on the precious metal.
- Buy physical gold – You can own physical gold bars or coins directly, on your own or within a gold IRA, but you’ll need to store the gold and physical gold doesn’t provide much liquidity if you need to sell it in a hurry.
- Gold futures – You can speculate on the price of gold using futures contracts, but be aware that the leverage magnifies your gains and losses.
- Gold ETFs – ETFs that track the price of gold are likely to be the best option for most investors who want to benefit from a rise in gold. You won’t have to worry about storing the physical asset and can sell your shares, just as you would a stock.
Investors may also consider purchasing stocks of companies involved in gold mining, but that is less of a direct bet on gold prices than the options listed above.
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.
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