Gold Prices Expected to Rise Amid Geopolitical Tensions
Gold prices are projected to increase in 2025, with forecasts suggesting an average price of $2,760 per ounce, up from $2,715. This anticipated rise is largely attributed to ongoing geopolitical tensions, particularly between the United States and China, which are expected to influence energy and commodity markets significantly. According to ING Groep NV, a financial services group, the demand for gold is likely to be driven by central banks diversifying their foreign reserves and the metal's appeal as a safe-haven asset during uncertain times.
Broader Commodity Market Outlook
While gold is expected to thrive, the overall outlook for other commodities appears less optimistic. ING's commodity strategists, Warren Patterson and Ewa Manthey, predict that many commodities will experience price declines in 2025 due to comfortable supply and demand balances. Specifically, Brent crude oil prices are expected to average $71 per barrel, down from current levels of around $74. The anticipated increase in U.S. LNG export facilities is expected to boost domestic demand and prices while providing Europe with alternatives to Russian gas supplies, potentially leading to lower natural gas prices in the region. In contrast, industrial metals like copper are projected to average $8,900 per tonne, reflecting a decrease from current prices of over $9,200. Additionally, grains are expected to face volatility due to weather concerns, with cocoa and coffee prices likely to be particularly affected.
