Gold Outshines Equities: Key Factors Shaping 2025 Prices

Gold has outperformed equities over the past five years, rising 70%-75% compared to stocks’ 50%-60% returns. This trend stems from inflation, economic uncertainty, and central bank buying.

In 2025, several factors will impact gold prices. US trade tariffs may boost demand for gold due to inflation concerns. Changes in the labor market, like declining immigration and rising deportations in the US, can tighten the labor market, leading to higher wages and production costs, which fuel inflation.

Persistent inflation has altered interest rate outlooks, with central banks maintaining high rates for longer periods. Geopolitical tensions, including the Russia-Ukraine war and increased defense spending in Europe, drive market uncertainty.

Gold serves as a hedge against currency depreciation and volatility. These economic and geopolitical factors will likely influence its price trajectory in 2025.

Overall, gold’s safe-haven status, along with these key drivers, will shape its performance in the coming years.