Arab Finance:Experts predict Gold industry The prices of the yellow metal will rise during the year 2025, both locally in Egypt and globally.
Amir Rizk, an expert in the gold industry, said: gold During January 2024, the price of gold witnessed stability, ranging between 3,100 pounds and 3,200 pounds for 21 karat, which is one of the most common calibers in Egypt. The yellow metal rose in August to reach 3,400 pounds, reaching 3,600 pounds in October, 3,700 pounds in November, and currently in the month of December. The price approached 3,800 pounds per gram.
Expectations of gold prices rising in 2025
As for expectations for gold prices in 2025, Rizk points out that he expects a gram of 21 karat gold to reach about 4,200 pounds, and it is expected to reach 4,800 pounds in May 2025.
Rizk explained, in exclusive statements to Arab Finance, that in the event of any geopolitical unrest, gold is expected to rise significantly as an investment and a safe haven, noting that most global central banks are hedging gold during that period as a profitable and safe investment at the same time.
Rizk confirmed that there are expectations that the price of gold will rise as a result of the rise in the price of the dollar globally, as the price of an ounce is expected to reach $3,500 during the month of May 2025.
For his part, Nadi Naguib, Secretary General of the Gold Division of the Cairo Chamber of Commerce, said in exclusive statements to Arab Finance that all indicators point to an increase in the price of gold during the year 2025, especially with global and regional variables related to geopolitical changes and unrest in the region, as investors use gold as a tool to hedge risks and a safe haven. For investment.
The tendency of central banks to reduce interest rates in the future is likely to increase the price of gold
Naguib added that the US Federal Reserve is expected to reduce interest rates during the year 2025 as a result of controlling inflation there, which will make investors move towards investing in gold as an alternative to investing in banks as a result of the low interest rate.
Naguib explained that the price of an ounce will increase during the coming period as a result of all these factors, pointing out that the reduction in the interest rate by the US Federal Reserve during this month is evidence of the predictions that he had previously predicted, which is that global central banks will tend to reduce the interest rate in the future and during the year 2025, which is likely to increase. Gold price.
Heraeus Precious Metals Company expects gold to continue its record highs until 2025, with major central banks moving towards further lowering interest rates and the possibility of a decline in the strength of the dollar, which will enhance demand for safe assets.
“Heraeus” expects gold prices to range between $2,450 and $2,950 per ounce in 2025, affected by continued purchases by major central banks, albeit in smaller quantities than in 2024, and geopolitical risks in Ukraine and the Middle East.
Yesterday, the Federal Reserve (the US central bank) reduced the interest rate for the third time in a row during 2024, by 25 basis points, so that it now ranges between 4.25 and 4.50%.
The Fed said in a statement that it will work to slow the pace of decline in borrowing costs in light of the relatively stable unemployment rate and a slight improvement in inflation recently.
The central bank's Open Market Committee, which sets interest rates, said in its latest monetary policy statement that “economic activity continued to expand at a strong pace,” with the unemployment rate “continuing to decline” and inflation remaining “fairly high.”
In new signals of a possible pause in interest rate cuts starting from the next meeting scheduled for January 28-29, 2025, the committee said, “Given the extent and timing of additional adjustments to the target range… the committee will carefully evaluate the incoming data, updated forecasts, and the balance of risks.”
Fed officials now expect only two more interest rate cuts of a quarter percentage point each time by the end of 2025.
This is half a percentage point lower than the cut that officials were expecting through September for next year, with the Fed's inflation forecast for the first year of President-elect Donald Trump's incoming administration rising from 2.1% in their previous forecast to 2.5% now, well above the central bank's target of 2.1%. 2%.
The Fed statement continued: “The Federal Committee will consider the extent and timing of additional adjustments to the target range for the federal funds rate by carefully evaluating the incoming data, evolving expectations, and the balance of risks.”
The Committee will continue to reduce its holdings of Treasury securities, agency debt, and mortgage-backed securities.
According to the statement, the Committee will be strongly committed to supporting maximum employment and returning inflation to its goals, and while evaluating the appropriate position of monetary policy, the Committee will continue to monitor the effects of the information received on economic expectations, and the Committee will be prepared to adjust the monetary policy position as necessary if risks emerge that may hinder achieving the Committee’s objectives.
It is noteworthy that the US Federal Reserve began reducing interest rates last September for the first time since 2020, by 50 basis points to between 4.75 and 5%, then reduced it by 25 points at the next meeting last November to reach a range between 4.50% and 4.75%. .
Gold prices are set to rise more slowly in 2025 after hitting a record high this year, according to the World Gold Council.
Bullion has risen more than 30% so far in 2024, but next year's gains are likely to be weakened by variables such as growth and inflation, the council said.
He stated in his forecast report for the year 2025 that the potential trade wars in the second term of US President-elect Donald Trump, and the complex expectations for interest rates, may extend to substandard economic growth, which will harm demand by investors and consumers.
The report added: “All eyes are on the United States. Trump’s second term may provide a boost to the local economy, but it may also raise a certain degree of concern for investors around the world.”
The bullion rally in early 2024 was driven by heavy purchases by central banks, especially the People's Bank of China and others in emerging markets.
Related news
