Record-setting gold: Further exploration could yield even greater possibilities
Gold prices have been on an upward trajectory, with futures reaching a new record high of $2,782 on Wednesday, following a two percent rise on Tuesday. This surge has left many investors wondering what's driving this trend.
The potential for gold's price to rise significantly remains, with experts predicting that it could reach $3,000, and even beyond, in the coming weeks and months. According to a study by WisdomTree, in a consensus scenario, gold's price could reach $3,030, while in a bullish scenario, it could reach $3,360.
One of the key factors driving this increase is inflation. Inflation remains above the Federal Reserve's 2% target, which historically enhances gold's appeal as a store of value and inflation hedge. Gold tends to appreciate during inflationary periods as investors seek protection from currency depreciation.
Rising global tensions and economic risks have also increased safe-haven demand for gold, pushing prices higher despite strong economic conditions that typically suppress gold's appeal. A weakening U.S. dollar further supports gold prices since gold is priced in dollars globally. As the dollar weakens, gold becomes cheaper for holders of other currencies, stimulating demand.
China's growing middle class and cultural affinity for gold underlie a significant surge in physical gold purchases. Chinese customs data show a 34% increase in gold buying in early 2025 compared to 2023, making Asia a critical driver of gold price growth.
Central banks around the world, especially China and Russia, are steadily increasing gold reserves as part of diversification and national security strategies, elevating demand on a large scale. The World Gold Council reports central banks acquiring over 1,000 metric tons yearly in recent years, more than double the past decade's average.
Expanded investment activity, particularly from institutional and retail investors, has also played a significant role in the surge. Gold ETFs and physical gold holdings have surged, reflecting strong portfolio demand for gold amid market volatility.
If Donald Trump wins the election, gold is likely to have further upside potential. Trump's election is expected to force the Fed to further lower interest rates, which could drive gold prices even higher. In a study by WisdomTree, Spartan Capital's Peter Cardillo predicts a short-term increase in gold price to $2,850.
Experts such as Brandon Aversano and Sameer Samana expect this momentum to continue, potentially driving gold beyond $3,500 per ounce by the end of 2025 and into 2026 due to these structural factors. However, outcomes may vary depending on economic developments; worsened stagflation or geopolitical tensions could push gold 10%-15% higher, while conflict resolution might prompt a price pullback.
In summary, the convergence of inflation, geopolitical instability, a weakening dollar, strong Asian physical demand, central bank buying, and institutional investor interest underpins the prediction of gold prices rising beyond $2,800 and possibly much higher.
Given the current circumstances, many investors are considering finance opportunities in gold, as experts predict that the price of gold could reach $3,000 and even surpass $3,360 in a bullish scenario. This growth is attributed to factors such as inflation, global tensions, a weak US dollar, increased demand from Asian countries, and central bank reserves, making investing in gold an attractive proposition.
