Zhitong Finance APP has reported that Gold prices have just achieved the largest annual increase since 2010, and amidst a difficult start to 2025 for Global Equity markets, it is welcomed with a positive opening. Goldman Sachs, Bank of America, and JPMorgan, among other Wall Street financial giants, generally predict that the bullish trend of Gold prices in 2024 will continue to rise further in 2025, with a strong hope of reaching the historical high of 3000 dollars.

The Federal Reserve's shift towards a more accommodative monetary policy, record purchases by global central banks, and the record debt levels in the USA have significantly reduced global confidence in the repayment of US Treasury bonds and have contributed to the ongoing geopolitical tension, which has been the main driving force behind the largest increase in Gold prices since 2010 over the past year. Looking ahead to 2025, aside from the first core factor facing uncertainty due to the Federal Reserve's shift to a 'hawkish' stance in December 2024, other core factors are still expected to support Gold in continuing to reach historical highs in 2025, especially as the global central bank gold rush and safe-haven demand are likely to continue to resonate.

After the Federal Reserve shifted to a hawkish stance due to significantly rising inflation risks and overall health in the labor market, the idea of 'higher for longer' (that is, the Federal Reserve will maintain high-interest rates for a longer period) returned to focus. This has led the market to begin pricing in the possibility that there may be no interest rate cuts in 2025 and that neutral rate expectations will continue to rise, which greatly weakened the investment attractiveness of Gold as a non-yielding asset in November and December 2024. This is also the biggest uncertainty that Gold will face in 2025.

Major Wall Street financial institutions including JPMorgan and Citibank expect that global central bank demand for gold purchases, along with concerns about US inflation and US fiscal spending irresponsibly leading to a repayment crisis for US Treasury bonds, will continue to drive up Gold prices next year. A survey by the World Gold Council supports the market expectation that central banks will continue to purchase Gold, which is likely to strongly support demand and maintain an upward trend in Gold prices.

Both Goldman Sachs and Bank of America expect that next year Gold prices will increase by 13% on the strong growth from 2024, reaching 3000 dollars per ounce, although this is still less than half of this year's record strong increase. The average expectation among the top ten financial institutions on Wall Street is that Gold prices will rise by 8% in 2025, reaching 2860 dollars.

Compared to the global stock market facing a difficult start, Gold welcomes a good start.

After the gold price recorded the largest annual increase in 14 years, gold has started off very smoothly in 2025, performing much better compared to the Global Equity market, which unexpectedly faced 'opening darkness' in 2025. On Thursday, Gold Futures prices rose by over 1%, lingering above $2,670 per ounce, the highest level since mid-December.Futures Trading Commission (CFTC)'s latest data shows that investors are significantly reducing their net short positions in US soybean, corn, and wheat contracts, easing bearish sentiment in the market.At the same time, the spot price of gold rose to around $2,660 per ounce, highlighting the optimistic expectations of investors favoring gold as an asset class regarding the Federal Reserve's at least 2 more interest rate cuts in 2025, as well as a positive outlook on Global central banks continuing to spend heavily on purchasing gold in 2025.

Despite the market beginning to price in the likelihood of US inflation returning due to 'tariffs on external goods + tax cuts on internal goods' under Donald Trump's MAGA policy framework after he won the US presidential election in November, the Precious Metals rally essentially stagnated. However, gold prices still ended the year with an annual increase of over 27%, surpassing the 23% annual increase of the US stock benchmark index, the S&P 500 Index, in 2024.

MAGA, an abbreviation for 'Make America Great Again,' refers to the core tone of all policies led by the Trump administration and is also used by some mainstream media to denote Trump himself and the American voters who fervently support him. Trump, known as 'King of Knowledge,' is set to return to the White House in January, and the MAGA wave will sweep across America once again.

The JPMorgan Analyst team wrote in a report at the beginning of 2025: 'We maintain our strong Call expectation for gold for three consecutive years.' They added: 'At the onset of the Trump administration in 2025, gold is still seen as a good investment tool to hedge against the highly uncertain global macro environment.'

The Bank of America Precious Metals team stated that due to the uncertainty facing the global economy from a series of radical trade policies likely brought about by Trump's return to power, along with the safe-haven demand stemming from global geopolitical turmoil, gold and Silver will receive stronger support in the new year. They emphasized that gold is 'the best hedging tool against the acceleration of inflation in the USA in 2025.'

In 2025, gold targets the epic milestone of $3,000.

JPMorgan predicted in a report that this year gold prices will rise to the epic milestone of $3,000 per ounce. Analysts at Goldman Sachs also predicted that due to the ongoing enthusiasm for gold purchases by major global central banks, gold prices are expected to reach $3,000 by the end of 2025. 'Our surveys and Historical Data indicate that central banks in Emerging Markets are buying gold to hedge against financial uncertainty and geopolitical shocks,' wrote the analysts at Goldman Sachs.

Analysts at Goldman Sachs also expect that if the scale of Gold purchases by major global central banks exceeds market expectations, gold prices could rise to $3,050. The institution also stated that if the Federal Reserve decides to cut interest rates only once more this year, gold prices may stagnate around $2,900. However, Goldman Sachs' $2,900 forecast is also above the average expectations on Wall Street.

When Trump's trade tariff measures - a key factor in our forecast for a stronger dollar by 2025, or the broader geopolitical shocks driving the dollar's strength - may result in both the dollar and Gold prices rising concurrently. The increasing uncertainty of geopolitical and stock market risks may be very beneficial to these two assets regarded as Global primary.Its price has soared to a historic high, closely related to market expectations of interest rate cuts by the Federal Reserve.The Goldman Sachs analyst team wrote in the report.

Recent persistent high inflation has raised doubts among investors about the Federal Reserve's ability to quickly lower borrowing costs. Some economists believe that certain policies proposed by the Trump administration, such as raising tariffs, could accelerate the pace of price increases and prompt the Federal Reserve to maintain high interest rates for a longer period, referred to as "higher for longer."

If the Federal Reserve lowers interest rates at least two more times, some market observers expect that retail investors may exit their wait-and-see approach towards gold, as they aim to preserve the value of their wealth and hedge against portfolio risks.

Steven Feldman, co-founder and CEO of the physical Precious Metals platform GBI, stated in an interview: "In 2024, retail investors in the USA have not really participated in the gold bull market." He added, "If the Federal Reserve's benchmark interest rate declines slightly, or if stagflation sentiment rises, I believe that the flow of funds from the large number of retail investors in the USA should be very optimistic, which would provide strong support."

In addition, investors are concerned that the large amount of debt issuance by the USA in recent years, facing an increasingly large budget deficit, will lead to the inability of the Treasury to repay the ever-increasing interest expenses, thereby resulting in higher pricing for long-term US Treasury yields. This financial market risk-off sentiment caused by those factors will also be a key catalyst for gold prices to reach the $3,000 mark.

The massive short-term treasury bonds have significantly raised the scale of US treasuries to $36 trillion within just a few years, which has led to increasingly high budget deficits and repeated record-high interest expenditures on US treasuries. Data compiled by institutions predict that nearly $3 trillion of US government bonds will mature in 2025, with most being short-term bonds. The US Treasury has been heavily issuing such bonds in recent years, as they are highly liquid and therefore quite popular.

However, this also means that the Trump 2.0 era not only needs to issue bonds to cope with domestic tax cuts and defense and livelihood expenditures under "de-globalization," but also faces significant repayments of treasury interest due to large-scale debt issuance, which are the core logic followed by treasury market investors in significantly raising the volatility center of the 10-year treasury yield recently, and will also be the core logic for safe-haven funds collectively flowing into gold. Some economists believe that the national debt and budget deficit during the Trump 2.0 era will be much higher than official predictions, thus further intensifying repayment pressure on US treasury bonds, pushing gold to become the most core asset class for hedging US treasury credit risk.