Demand for safe havens boosts the outlook for gold
The price of gold rose to a record high at the beginning of 2025 due to the increasingly volatile global economy. This rise has prompted analysts to revise their outlook and forecast even higher price targets. Gold is expected to reach USD 3500 by the end of the year. We assume that the upswing will continue into next year and that prices will stabilize at a higher level. In mid-May, the Global Investment Committee decided to include gold in the investment portfolios, as this asset class currently has a tailwind and diversifies the portfolio.
Commodities: a golden opportunity?
In den letzten Jahren hat der Goldpreis einen starken Aufwärtstrend erlebt, und wir gehen davon aus, dass die Faktoren, die diesen Aufwärtstrend antreiben, anhalten werden. Zum einen stocken die Zentralbanken weltweit ihre Goldreserven auf, was zu einer höheren Nachfrage führt. Zum anderen gilt Gold als Absicherung gegen Unsicherheit, was es im aktuellen Marktumfeld besonders attraktiv macht. Trotz des deutlichen Anstiegs des Goldpreises erwarten wir für den Rest des Jahres weitere Kursgewinne. Nach unseren jüngsten Portfolioveränderungen verfügen wir über eine erhöhte Cash-Position. Wir setzen einen Teil dieser Barmittel in Goldanlagen für einige unserer Kundenportfolios ein. Wir empfehlen dies insbesondere Kunden, für die Gold zu den Zielen ihres Anlageportfolios passt.
Why the price of gold is rising
Despite a rise of around 30% since the beginning of the year, there are several strong indicators that suggest that the upward trend will continue. Firstly, the positive sentiment for gold is fundamentally linked to its status as a safe haven in times of macroeconomic uncertainty. Gold shines in such an environment because concerns about inflation and economic slowdown drive investors into gold as a hedge against potential losses.
Another important factor is the unexpectedly strong demand from central banks. Growing concerns over the weakening dollar have prompted central banks to seek to de-dollarize in order to reduce dependence on the US currency. By accumulating gold reserves, central banks are reducing the risk of dollar fluctuations and hedging against political and economic risks.
Finally, a recent pilot program implemented by China allows certain insurers to invest in gold, which offers diversification and liquidity benefits. The program limits gold to 1% of total assets, suggesting a potential inflow of around RMB 200 billion into the gold market. This is equivalent to just over 10% of the average daily trading volume. This initiative could represent an overall positive long-term development, reflecting the growing interest of institutional investors in participating in the gold market.
Factors that could worsen the outlook for gold
Although the outlook for gold remains largely positive, several factors could exert pressure on prices in the near future. Geopolitical developments such as a ceasefire between Russia and Ukraine or a further de-escalation of tariffs could lead to market consolidation. Such stabilization could reduce the uncertainty that drives investors into safe investments such as gold. Moreover, gold generally moves in the opposite direction to the dollar. So if the dollar strengthens as a result of easing trade tensions and tariffs, this could have a negative impact on the gold price.
Conclusion
The outlook for gold remains promising. For investors concerned about inflation and market uncertainty, gold remains attractive. While there is still upside potential, there are also downside risks if demand for safe-haven assets weakens. Nevertheless, continued central bank buying and demand from private investors should stabilize and support the gold market. Even though the price of gold has already risen significantly, we expect the upward trend to continue in 2025. We therefore recommend buying gold.
