Skip to content
All about finance. — Coincodex — 2025 — Investing — Metals — Finance — Strategic — Average — Business

Gold Prices Surge Ahead

Global currency markets witness a downturn in the US dollar's value, boosting interest among individual investors, notably in China. Central banks are augmenting their gold purchases, while production growth faces challenges. These factors are anticipated to bolster gold and other precious...

,   and  Administrator
3 min read
Global currency fluctuations, increased investment interest among private buyers, especially in...
Global currency fluctuations, increased investment interest among private buyers, especially in China, central bank acquisitions, and challenges in expanding production output are expected to bolster the cost of precious metals.

Gold Prices Surge Ahead

Gold's recent correction, a drop in price after a rapid rise, is just a segment of its dynamic lifecycle. Investors, who've secured some profit and are attempting to foresee future price movements, caused the gold price to dip after reaching a historic high on April 22. This shift occurred within a wide range of $3240-3360 per troy ounce. Despite this temporary setback, factors that caused gold's impressive 19.3% increase in Q1 2025 persist, warranting the possibility of a new uptrend.

One major reason for the gold price surge is increased demand from private investors, who favor ETFs (Exchange Traded Funds) with gold as their underlying asset. The World Gold Council (WGC) reports that these funds acquired 226.5 tons of gold in January-March 2025, an astronomical increase compared to the 18.7 tons in the previous quarter, and a dramatic turnaround from the 113 tons Net outflow in 2024. This heightened interest, particularly in Chinese "gold" ETFs, reached record levels in April, with a massive inflow of over $7.4 billion, more than doubling the previous high.

In the investment market, demand soared by 60% quarter-on-quarter and 170% year-on-year in the first three months of 2025, reaching 551.9 tons. According to WGC, this explosion in demand is driven by “price momentum and uncertainty in trade policy,” prompting investors to seek gold as a safe haven. This upward trend in gold has been observed since the fourth quarter of 2023.

Strategic reserves of states are another support for gold's price. WGC indicates that central banks have been net buyers for 16 consecutive years, expanding global reserves by 244 tons in the first quarter, albeit 21% less than the same period last year. The continued purchases of China, India, and Russia are expected to amount to over 900 tons of gold by the end of 2025. Dmitry Tselyushev, managing director of investment company "Ricom-Trust", shares this outlook in his interview with "Expert". Additionally, the National Bank of Poland, unexpectedly the largest gold buyer in 2024, added another 49 tons to its reserves in January-March.

Stagnation in gold supply is a significant factor. In Q1 2025, mining decreased by 11% compared to the previous 3 months, remaining unchanged year-over-year. Secondary gold production also dipped by 4%. Natalya Milchakova, leading analyst at Freedom Finance Global, points out that sanctions and embargoes play a significant role in the reduction of investments in gold mining and production, particularly for large producers like Russia. Recovery in production may be witnessed in the next 2-3 years as China and India demand increases.

Finally, despite numerous forecasts for gold prices in 2026, uncertainty remains about the wisdom of investing in gold for individual investors. Though some analysts anticipate gold prices rising beyond $3,500 and even potentially reaching $4,000, advice for the average investor is to exercise caution due to factors like slowing global economic growth, potential renewed USD strength, and fluctuations in the USD to RUB exchange rate.

#PreciousMetals#Gold#Investments#ETFs

  1. In the first quarter of 2025, private investors showed increased interest in gold, particularly in Chinese "gold" ETFs, leading to a massive inflow of over $7.4 billion, according to the World Gold Council.
  2. Despite a temporary setback in gold's price, strategic factors such as net purchases by central banks, stagnation in gold supply, and heightened demand from investors, particularly ETFs, persist, suggesting a potential new uptrend.
  3. According to Dmitry Tselyushev, managing director of investment company "Ricom-Trust," global reserves of gold increased by 244 tons in the first quarter of 2025, with continued purchases from China, India, and Russia expected to amount to over 900 tons by the end of 2025.
  4. In the investment market, demand for gold soared by 170% year-on-year in the first three months of 2025, with analysts like Natalya Milchakova of Freedom Finance Global attributing this trend to "price momentum and uncertainty in trade policy." However, individual investors are advised to exercise caution when considering gold investments in 2026 due to potential fluctuations in global economic growth, the USD strength, and exchange rates.

Read also:

    Related

    Latest