This is the unexpected investment of the past year: the price of gold increased by almost 10%, as of December 15. This new increase brings the precious metal’s gain to 67% over five years, and more than 100% over ten years. However, nothing suggested that 2023 would be a good time. Indeed, as this resource does not offer any income, it is less popular when interest rates are high because competing investments such as government bonds or term accounts display more attractive returns. But that was without taking into account the various crises which affected the price of the ounce, starting with tensions in the banking sector in March, then the fighting in Gaza at the end of the year. “The perception of geopolitical risk has been exacerbated with the crisis in the Middle East. And gold is traditionally very sensitive to it,” reports François de Lassus, consultant for Or en Cash. Another supporting factor: demand for physical gold remained solid, whether from investors, central banks or the jewelry industry.
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Forecasts of +20% in 2025
Despite this surprise rise, many observers are counting on a continued rise in the price of bullion and other napoleons. Thus, UBS analysts see an ounce of gold at $2,200 in 2025, an increase of 20%. The latter are betting in particular on the change in the macroeconomic scenario and the fall in real interest rates, adjusted for inflation. Indeed, the consensus now anticipates a reduction in the key rates of the main central banks during the year. In addition, “the risk to the global economy is clearly on the rise this year, with a recession or financial dislocation likely to materialize and geopolitical tensions to intensify, said WisdomTree’s head of commodities, Nitesh Shah. Gold is a popular asset in times of economic, financial and geopolitical stress, so these triggers could create even greater attraction for the metal.”
However, it is very difficult to anticipate movements in gold in the short term. It is better to devote, structurally, a small part of your portfolio, around 5% maximum, without trying to speculate. To do this, the simplest way is to buy bars – they come in all sizes and at all prices – or financial products reproducing the price of gold. In this case, favor supports backed by physical gold stocks.
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