In this podcast our Global Head of Forex Strategy Peter Kinsella sheds some light on the mechanisms behind gold’s spectacular rise.
Amongst the key drivers behind gold’s almost 40% performance from peak to trough, he highlights the combination of surging physical gold demand from central banks – which nearly doubled – and growing interest in exchange-traded funds (ETFs) from retail investors worldwide.
Peter points out that retail buyers are responding not only to uncertainty led by armed conflicts but also to a new era of geopolitical shifts where traditional commercial rules no longer hold. They are also concerned about growing fiscal spending despite already elevated debt levels. As central bank rate cuts lower the opportunity cost of holding gold, the yellow metal has become an attractive anchor for their portfolios.
Historically, inflation has been a key factor in driving gold prices higher, with its secular trend rising in the aftermath of the pandemic. The potential for inflationary policies under the Trump administration could further bolster this upward momentum.
Are these drivers for gold sustainable in 2025? Yes, responds our expert. To find out how far he anticipates gold prices rising, and for some insights on silver too, tune into this podcast.
