2025 International Gold Price Status and Rise Factors Analysis: What is the Year-End Target?

International Gold Prices Hit Record Highs

Gold prices are reaching historic highs. As of July 5th this year, international gold stands at $3,337.04 per ounce, representing a 27% increase since the beginning of the year and a 39% rise compared to the same period last year. Domestic spot gold also increased by 43% from last July, reaching 635,000 KRW per 3.75g of 1 don.

Looking at the Korea Gold Exchange chart, there was a clear upward trend until May. Currently, the rally has slowed somewhat, but there are no signs of a significant decline yet. Since domestic gold prices and international gold prices move in the same direction, understanding the global gold market context is crucial for predicting future market trends.

Four Key Factors Driving International Gold Demand

( Weak US Dollar and De-dollarization Trends

Several countries are working to reduce their dependence on the US dollar in international trade. This is driven by two goals: strengthening economic sovereignty and avoiding US sanctions. China is actively promoting the internationalization of the yuan, while India is seeking to expand the use of the rupee. These de-dollarization policies lead to a weaker dollar, which in turn boosts gold demand.

) Rising Geopolitical Tensions

Gold is a typical safe-haven asset, attracting capital during times of high uncertainty. The US-China trade conflict, the Russia-Ukraine war, and instability in the Middle East have all driven gold prices higher. Past experiences, such as during the 2008 financial crisis and the 2020 COVID-19 pandemic, show that gold prices reached record highs during these periods.

Signs of Economic Weakness in Developed Countries

Inflation pressures in the US and growth slowdown concerns in Europe are driving investors toward safe assets. As economic uncertainty increases, gold’s appeal as an inflation hedge also grows.

Central Bank Rate Cuts

When interest rates fall, the attractiveness of interest-bearing assets diminishes, reducing the opportunity cost of holding gold. Additionally, rate cuts often signal economic weakness, prompting investment funds to flow into gold. The case of international gold surging after the Federal Reserve’s 50bp rate cut in September last year exemplifies this.

2025 International Gold Price Outlook: Diverging Expert Views

Bullish Outlooks

Most international financial institutions expect further increases in international gold prices this year. JP Morgan recently projected a year-end target of $3,675 per ounce. Considering the current price already exceeds $3,337 and about five months remain, this scenario appears quite feasible.

Goldman Sachs and CitiGroup have set early 2025 targets at $3,000 per ounce, which have already been surpassed. The consensus among banks and refiners, as compiled by the Financial Times, was around $2,795 by year-end, but actual prices have already significantly exceeded this estimate.

Bearish Outlooks

Barclays and Macquarie have set year-end targets at $2,500 per ounce, implying about a 25% decline from current levels. However, given the current structural bullish factors, the likelihood of such a scenario materializing seems relatively low.

Points to Consider When Investing

Based on various forecasts, international gold is likely to maintain its upward momentum into 2025. However, since some experts suggest a possible correction in the second half, careful risk management and position management are essential. It is especially important to continuously monitor changes in key interest rates, geopolitical issues, and dollar trends, and to respond swiftly to market signals.