Outlook for Gold and Silver Remains Positive for 2025
BMO Capital Markets, a Canadian investment bank, has highlighted gold and silver as key assets for investors' portfolios in its commodities outlook for 2025. According to the bank's analysts, these two precious metals are essential for inclusion in portfolios in the new year.
The commodity analysts at BMO Capital Markets noted that demand forecasts for certain metals have been revised downward in their assessments for 2025. They pointed out that the trend of moving away from globalization could slow economic growth and negatively impact demand for industrial metals.
In a report, BMO's analysts emphasized that global trade tensions have harmed the metals and mining sectors. They stated that tariffs, particularly between the U.S. and China, create uncertainty in demand forecasts within the industry. Additionally, the potential for a multilateral trade war involving Canada, Mexico, Europe, and Asian countries could exert further pressure on the sector.
The report mentioned, "There is no escaping the fact that tariffs are not beneficial to the metals and mining sectors," and it indicated that demand forecasts are lower compared to three months ago. It also noted that if trade tensions escalate, the downside risks to demand forecasts could increase.
In the gold market, attention has shifted back to macroeconomic data and the Fed's interest rate policies following a decrease in geopolitical developments. Today's conclusion of the FOMC meeting could significantly impact gold prices. Analysts indicate that the Fed's statement and projections will be crucial for market movements.
While it is noted that major central banks are expected to synchronize interest rate cuts in the second half of 2024, a slowdown in this pace is anticipated for 2025, although further rate cuts are expected. The Fed's guidance on its interest rate path will be closely monitored by the markets.
Regarding the technical outlook for gold, it has been reported that the price of gold has recently stabilized at peak levels, with movements above $2,715 potentially pushing prices up to $2,800. On the downside, price movements below $2,615 could increase selling pressure in the short term.
Currently, gold is hovering around $2,646, with a support level identified at $2,630, while the resistance level at $2,720 has been tested twice since November. A continuation of a sideways movement is anticipated throughout the day, although price fluctuations in the gold market may occur following the Fed's interest rate decision.
Expectations for 2025 also highlight the influence of Donald Trump's protectionist policies. Analysts assert that these policies could have inflationary effects and increase demand for safe-haven assets like gold. The impact of steps taken by the Fed regarding its interest rate policy and the economic policies of Trump will be decisive factors in the performance of precious metals in 2025. In this uncertainty, gold and silver will continue to stand out as investors seek safety.