Trade uncertainty and monetary policy drive gold and silver in 2025. Goldman Sachs expects gold to continue its upward trajectory. Silver will follow this trend.
The tariff uncertainty unleashed by US President Donald Trump continues to trigger a series of reactions in the financial markets. The protectionist measures, which affect countries such as China, Mexico and Canada, have generated fears of a possible global economic slowdown, and investors have sought refuge in assets considered safe, such as gold and silver.
In the case of the first metal, during 2024, it has recently reached record highs, surpassing US$2,900 per ounce, driven by the growing demand for safe haven in the face of economic uncertainty. So far this year, it has risen 11.5% and several analysts predict that it will exceed US$3,000 this year.
One such is Goldman Sachs (GS), which last week raised its forecast for the gold price, projecting an 8% rise to US$3,100 per ounce by the end of 2025, driven mainly by increased demand from central banks.
According to analyst Lina Thomas' report, this trend is due to the increase in the purchase of gold reserves by financial institutions, especially since the Russian central bank's asset freeze in 2022. In addition, the fall in interest rates expected by the Federal Reserve would make gold more attractive against bonds.
However, the report notes that speculation in futures markets could put downward pressure on prices, as many investors have accumulated long positions in gold due to the uncertainty generated by the Trump administration's policies.
Still, Goldman Sachs warns that factors such as fears of high government indebtedness or geopolitical risks could push the gold price to US$3,300.
Weak dollar boosts gold prices
The price of gold maintained its upward trend in February, reaching several all-time highs before retreating to close the month at US$2,835 per ounce, up 0.8% from January, according to the World Gold Council.
This performance was driven by the weak dollar, rising geopolitical risk and falling interest rates. In addition, gold purchases through ETFs recorded net inflows of US$9.4 billion (100 tons), the highest since March 2022, with strong fund leadership in the U.S. and Asia.
The World Gold Council report highlights that uncertainty over trade tariffs and aggressive foreign policies have reduced the attractiveness of the "Trump trade," boosting safe-haven assets such as Treasuries and gold.
Added to this are expectations of higher fiscal deficits due to increased military spending and the possibility that the Federal Reserve will adopt a more flexible stance with at least two rate cuts this year.
According to a survey by the London Bullion Market Association (LBMA), the gold price will trade at an average of US$2,736.69 per ounce in 2025, remaining close to its current level.
The gold price forecast, based on the opinion of 26 analysts, shows a divided view: the most optimistic estimate comes from Keisuke Okui of Sumitomo Corp. who projects a price of up to US$2,925, while the most pessimistic is from Robin Bhar of Robin Bhar Metals Consulting, with a projection of US$2,500 per ounce.
Where is the silver price heading?
The London Bullion Market Association survey also shows that market analysts project that the silver price will follow the upward trend of the gold price in 2025, with an estimated average of US$32.86 per ounce, up 16% from the 2024 average of US$28.27.
This projection is supported by growing industrial and investment demand, as well as the historical tendency of the silver price to follow the behavior of the gold price.
The highest forecast is from Nicky Shiels, strategist at MKS PAMP, who says silver is set to be the best-performing precious metal in 2025, driven by key macroeconomic factors.
A synchronized cycle of interest rate cuts by central banks, a more favorable environment in both China and the United States and still-strong solar demand, coupled with a downward trajectory of the U.S. dollar, favor a revaluation of the silver price.
However, the upward trend will depend on investment demand overcoming any possible contraction in industrial consumption, especially in the face of uncertainty generated by possible tariffs from Donald Trump. In this context, market participation-both institutional and retail-should exceed the moderate capital inflows recorded in 2024.
The attractiveness of silver versus gold is underpinned by several elements, according to Shiels. First, its price is relatively lower compared to historical peaks, suggesting greater room for appreciation. In addition, its correlation with a weaker dollar and a reflation cycle makes it more elastic in terms of appreciation. Added to this is the tightness of the physical market, with lower available inventories, which reinforces its upward bias.
On the other hand, Nicholas Frappell (ABC Refinery) is the most conservative analyst, with an estimate of US$28.25 per ounce for the silver price.
For the analyst, while it maintains an uptrend on weekly and monthly time frames, supported by growing demand stemming from electrification and the rise of electric vehicles, on the downside, a stronger dollar could dampen Indian demand, while the risk of new tariffs could affect global economic growth.
Carlos Rodríguez Salcedo, Bloomberg