China News: Gold and Silver Price Outlooks 2025
TD Bank Comments
Overall, driven by the Fed's interest rate cuts, which have boosted demand for gold exchange-traded funds (ETFs) and the continued trend of central banks buying physical gold, the international gold price in 2025 will beIt is expected to maintain an upward trend and is expected to rise above $3,000 per ounce. However, in the short term, the upward trend will weaken, market divergence will intensify, and the market may still be dominated by fluctuations.
The United States has entered a cycle of interest rate cuts, and investment demand is expected to drive the international gold price to further strengthen. From the perspective of monetary policy, the current US Consumer Price Index (CPI) and core CPI have fallen back to 2.6% and 3.3%, respectively, which are close to the historical central level. In addition, the current US national debt of more than 36 trillion US dollars is difficult to coexist with a high interest rate environment. It is expected that the interest rate cut process will continue, and it is expected to cut interest rates by 50 basis points to 100 basis points in 2025. At the same time, the 10-year US Treasury yield is also expected to fall from the current high of around 4.5%, which will provide strong support for the international gold price.
According to historical data, the demand for gold ETFs tends to pick up only after the federal funds rate is actually lowered, and every 25 basis point rate cut will lead to an increase of 60 tons in global gold ETF holdings. The author expects that as the Fed continues to cut interest rates, this trend of ETF holdings will continue in 2025, thereby supporting the performance of international gold prices.
The central bank's gold purchases are expected to continue, supporting the international gold price. Over the past few decades, the proportion of gold in the total reserves of global central banks has continued to decline, from nearly 40% in 1970 to 6% in 2010. However, it has steadily climbed since 2011, rising to 11% in 2023, especially since the Russian-Ukrainian conflict in 2022. The author believes that this is mainly due to the combined impact of the market on the growing scale of US debt and the rise of isolationism .
In the first three quarters of 2024, central banks around the world purchased a total of 694 tons of gold, the same as the same period in 2022, maintaining a relatively fast growth rate. At the same time, according to a survey of 70 central banks around the world by the World Gold Council, nearly 30% of the central banks surveyed plan to increase their gold reserves in the next 12 months, setting a record high since the central bank gold purchase survey was launched in 2018.
Since 2024, the international gold price has recorded a substantial upward trend, which has reflected the aforementioned interest rate cut cycle and the positive effects of the central bank's continued gold purchases in advance. It is expected that after the short-term shock and digestion of selling, a new round of upward trend will be restarted. In 2025, it is expected to rise to around US$3,000/ounce, setting a new record high. In the later period, we will focus on Trump's policies and the Fed's interest rate cut path.
(The above content does not constitute investment advice or operating guidelines. It is the author’s own opinion and does not represent the opinions of the unit where he works or the position of this platform.)
Silver Price Outlook
Looking ahead to the international silver price in 2025, most analysts and investment banks believe that although industrial demand may be hit, especially in the first few months of 2025, the performance of the international silver price is still likely to exceed the international gold price in the second half of the year..
Commodity strategists at TD Securities noted in their 2025 outlook that the economies of China and the United States are expected to strengthen in the second half of 2025, which will boost silver.demand and tighten the undersupplied silver market, digest excess inventory and have the potential to rise to $36/oz.
At the same time, as the Fed's rate cut cycle continues, purchases of silver exchange-traded funds (ETFs) may increase, which may greatly shorten the time it takes for existing silver stocks to be exhausted. TD Securities predicts that the average international silver price will be $33.25 per ounce in the first quarter of 2025, $33 per ounce in the second quarter, $34 per ounce in the third quarter, and $36 per ounce in the fourth quarter, a year-high. The outlook for international silver prices in 2026 is more optimistic, and is expected to be in the range of $38 to $39 per ounce.
There are also analytical views that the international silver price may experience a sharp correction, provided that the international gold price falls to around US$2,500/ounce, and the international silver price may follow suit and fall to around US$20/ounce, but it is also a good buying opportunity.
Darin Newsom, senior market analyst, said the United States is habitually dependent on crude oil.The driving force provided by energy has led to insufficient participation in the research and development of electric vehicle technology worldwide, which has dealt a blow to the industrial demand side of the silver market.
Newsom also warned that many people believe that when the gold-silver ratio rises to historical highs, traders will buy silver again, but it would be dangerous to rely on this ratio in 2025 and ignore market fundamentals.
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