Gold Price Outlook

Gold Price Outlook for the Next 6-18 Months

Gold prices have surged to record levels, and expectations support growth over this period. After hitting an all-time high of $3,500/oz in April 2025, gold remains up roughly 25-30% year-to-date. Many major financial institutions have raised their gold forecasts for the year. J.P. Morgan expects the price to hit $4,000/oz in a year. Their forecast assumes continued investor and central bank buying. Goldman Sachs changed its year-end estimate of $3,300/oz to $3,700/oz after the rapid rally at the end of Q1, moving into Q2 of 2025. Most major banks and brokerages remain bullish given economic conditions and geopolitical tensions. Despite this, some expect a pullback by the end of the year as heat leaves the market.

Political Climate, Tariffs, and Demand

Global political uncertainties, especially trade tensions, are a significant driver of gold’s strength. Current administration policy has led to rising tariffs and trade wars, rattling markets, and boosting safe-haven flows into gold. The 6-month rolling total of announced layoffs reaching 700,000, long-term yield curve inversion, and trade wars all strongly indicate a recession. This is a major reason why gold is expected to continue its upward trajectory. The World Gold Council’s data also indicates that uncertainty is pushing investors into gold as gold-backed ETFs saw their largest inflows since 2020.

Beyond trade tariffs, other political and policy factors are contributing to its appeal. One is fiscal policy and debt concerns. On the 3^rd of July, the House passed President Trump’s sweeping tax cut and spending bill that adds estimates of $3.3 trillion to the national debt. This ballooning debt raises the fear of long-term dollar inflation. Geopolitical flashpoints are also in play, as ongoing wars in Ukraine and the Middle East create a current of uncertainty. Any oil supply shocks will likely send investors to gold.

Monetary Policy, Interest Rates, and Economic Factors

The macroeconomic backdrop is another critical pillar of the gold outlook. After aggressive rate hikes in 2022-2023, the Fed is beginning to cut interest rates, initiating an easing cycle as economic momentum slows. Lower rates make non-yielding gold more attractive by reducing the opportunity cost of holding gold versus interest-bearing assets. Gold often thrives in low or negative real interest rate environments. Institutions such as Goldman Sachs reiterate a long gold recommendation due to the gradual boost from lower global rates in addition to its hedge value.

Economic conditions appear with growth decelerating and labor markets softening. Many believe the U.S is in a late cycle with expectations of the Fed to continue to cut rates into 2025. This is backed by fed officials confirming cuts by the end of the year, just no confirmation on the date. Gold should remain strong even if the Fed is late to combat any inflationary worries. Gold stands to benefit in both scenarios, if growth slows sharply, spurring rate cuts, and if inflation surprises on the upside, spurring demand for gold as an inflation hedge.

Another factor is the dollar’s trajectory. Should expansive fiscal and trade policies continue to undermine confidence in it, gold prices typically rise. There are hints of this occurring as some investors are moving into foreign markets. If more reallocation occurs, and even a small portion into gold, it could have a large impact on the price, given its market size relative to equities or bonds.

Central Bank and Investor Demand Trends

Demand from both banks and investors is a fundamental support for gold’s value. The past few years have seen record-breaking central bank gold buys providing a floor under the market. According to World Gold Council data, central banks worldwide accumulated 1,082 tons of gold in 2022, the most in any year on record. The following two years posted similar numbers, falling by around 30 tons each year. The three-year wave of over 1,000 tons of annual purchasing reflects efforts to diversify and hedge risk. It has been a key factor in its run.

On the private side, investor sentiment is very positive, backed by large flows into funds and other products. Gold ETFs have seen a resurgence of inflows. In the first half of 2025, these ETFs raised roughly $38 billion, the largest in 5 years. These equate to roughly 397 tons added to holdings. U.S-listed finds led the way with over 200 tons added, but Asian investors also contributed 28% of the demand.

Physical demand patterns are also present. Traditional jewelry and retail coin demand tends to soften, especially in price-sensitive markets. This impact is minor in comparison to flows from central banks and individuals.

Impact on Gold Mining and Supply

While demand has been the main story, supply also plays a role in the gold outlook. Global production has been stable to slightly rising in recent years, with output from major producers such as China, Australia, Russia, the U.S, and Canada. High gold prices encourage miners to increase production and can make marginal projects economical. Many producers may try to bump up supply through enforced infrastructure or M&A. However, new supply is slow to start as many of these projects take years to implement, meaning supply constraints won’t significantly cap the price in the near term.

Political and tariff issues can also impact mining operations. One concern is the cost side as industrial goods and metals raise input costs. If the U.S and China trade war intensifies, supply chains for critical mining components could face disruptions of higher prices. Geopolitical tensions also contribute to worries, but supply isn’t dampened, but rather re-routed to other countries, such as Russia’s case.

The push for supply chain independence might spur more domestic mining investment in the U.S and allied countries. The Biden administration’s tariffs on Chinese critical metals, such as lithium, while not directly targeting golf, underscore a trend of governments seeking to secure mineral supply. Another consideration is regulatory and geopolitical risk in mining jurisdictions. High gold prices can sometimes provoke resource nationalism or environmental scrutiny, as gold mining is highly disruptive. As for now, no major supply disruptions are evident among top producers. On the face, the mining sector stands to gain from elevated prices, and slow project development means the gold supply will expand gradually, keeping the market tight if demand continues to grow.

Overall

The gold mining industry and royalty companies are in a favorable position. They are enjoying high prices with demand from central banks, institutions, and individuals. The expectation is that gold’s value will remain high through 2025.