Gold “primed for bullish surge” in early 2025: deVere Group

New market analysis from global advisory and asset management firm, deVere Group, has suggested that gold prices are set for a “bullish surge” in the first quarter of 2025.

deVere Group chief executive, Nigel Green, said the “aggressive” rate at which central banks around the world had moved to increase their gold reserves indicates that the metal’s prices could hit historic highs in early 2025.

“Gold buying has now surged to nearly three times the level it was before 2022, and the outlook suggests continued strong demand into 2025,” he said.

“This wave of buying is not just about portfolio diversification—it’s a strategic move to mitigate risks. Countries, especially those wary of US financial sanctions, are increasingly turning to gold to shield their reserves from political and economic pressures.

“China, for instance, has been a key player in this trend. In 2023, China’s central bank added to its gold holdings for 10 consecutive months, underscoring the nation’s intention to reduce its reliance on the dollar amidst growing geopolitical tensions with the West.

“This buying intensity continued well into 2024, with net purchases of 290 tonnes recorded in the first quarter of 2024 – the fourth strongest quarter of purchases since the buying streak began in 2022.”

Green noted that the trend of central banks purchasing gold accelerated around the start of the Russia-Ukraine war, as they look to pivot away from US dollar-denominated assets. However, this has since expanded to include central banks in Turkey, Singapore, Brazil and India looking to protect against currency volatility and political tensions.

The US Federal Reserve’s shift away from tightening monetary policy towards interest rate cuts is also set to fuel rising gold prices, Green said.

“Higher interest rates make gold less attractive as it doesn’t generate yield. However, with rates poised to fall, the tables are turning. Lower rates can often reduce the appeal of yield-bearing assets, drawing some investors – both retail and institutional – back into the gold market,” he said.

“Gold offers unparalleled protection in such scenarios, especially as concerns grow around issues such as Fed independence, global debt sustainability, and financial sanctions.

“One scenario that could send gold prices soaring is an escalation in financial sanctions comparable to the surge seen since 2021. Another potential trigger could be worsening debt fears in the US.

“Against this backdrop, and should the current momentum be maintained, we could see new all-time price highs for gold in the first quarter of 2025.”