Forex Analysis & Reviews: 02.01.2025 - What Awaits Precious Metals...

InstaForex - Official partner of Dragon Racing

This section features the most important information about trading with InstaForex. We provide both analysis from leading experts for experienced traders and articles on trading conditions for beginners. Our services will help increase your profit potential.

Become Trader

Account Opening

See also

Trading Conditions

Forex Analytics

Charts

This section is designed for those who are just starting their trading journey. InstaForex educational and analytical materials will meet your training needs. Our experts' recommendations will make your first steps to trading success simple and clear.

Start as Beginner

How to start trading

Useful information

Training and recordings

InstaForex innovative services are an essential element of productive investment. We strive to provide our clients with advanced technical capabilities and make their trading routine comfortable as we are recognized as the best broker in this regard.

Become Investor

PAMM System

ForexCopy System

Passive investments

OYS account

Partnership with InstaForex is beneficial and top-tier. Join our affiliate programs and enjoy bonuses, partner rewards, and the possibility to travel with the team of the world-renowned brand.

Become Partner

Main Page

Partner Area

Advantages for Affiliates

Registration

This section contains the most lucrative offers from InstaForex. Receive bonuses when topping up an account, compete with other traders, and get real prizes even when trading in a demo account.

All Promo Campaigns

Bonuses

Contests

Events

Holidays with InstaForex are not only pleasant but also useful. We offer a one-stop portal, numerous forums, and corporate blogs, where traders can exchange experiences and become successfully integrated into the Forex community.

Full details

Forums

We are in social networks

Forex humour

Forex Portal

InstaForex is an international brand created in 2007. The company provides services for online FX trading and is recognized as one of the world's leading brokers. We have won the trust of more than 7,000,000 retail traders, who have already appreciated our reliability and focus on innovations.

Learn More

History

Why Choose Us

InstaSport

Regulation

Company News

Awards

InstaForex Stars

InstaForex Offline

Headquarters

Key documents

Social Responsibility

InstaForex - Official partner of Dragon Racing

02.01.2025 01:27 PM

What Awaits Precious Metals in 2025?

In 2025, many developed countries will continue lowering interest rates, but the pace of these reductions will depend on regional and economic conditions. In the United States, the Federal Reserve plans to act more cautiously than other central banks. The Fed forecasts only two rate cuts this year, fewer than previously expected. This cautious approach stems from the relatively stable U.S. economy and persistent inflation.

Most major banks have lowered their interest rate expectations. Fixed-income analysts at Bank of America agree with the Fed's forecast of two rate cuts. Banking holding company Wells Fargo is slightly more conservative, predicting only one rate cut this year. However, Canadian multinational investment bank TD Securities predicts four rate cuts, estimating that the federal funds rate will drop to 3.50% by year-end. Meanwhile, U.S.-based investment company BlackRock believes Treasury yields will rise by year-end, as the Fed is unlikely to aggressively cut rates.

Not all analysts, however, are confident that the U.S. economy can withstand geopolitical uncertainties and the unintended consequences of policies proposed by President-elect Donald Trump.

Ahead of his inauguration, Trump threatened to impose trade tariffs on nearly all major global economies. These tariffs would promote domestic production and support the U.S. dollar, but the policy comes with costs and could exacerbate existing inflationary pressures. In short, Trump's presidency implies higher U.S. inflation and weaker global growth. However, if Trump's tariff threats remain just that—threats—the world's economic growth rate, considering high U.S. inflation and migration policies, might slightly underperform its 3% trend.

Banking experts predict that if Trump's tariff plan materializes, its effects will only begin to be felt in Q3 2025. Regarding the Fed's monetary policy and its impact on precious metals, many analysts expect shifting rate expectations to create short-term obstacles and volatility for precious metals. Limited Fed rate cuts will support the U.S. dollar, posing another significant challenge for precious metals.

Nevertheless, analysts in commodities remain confident that gold will surpass $3,000 per ounce by year-end.

Additionally, the correlation between gold and Treasury yields, and even the U.S. dollar, has broken down as central banks continue purchasing large volumes of precious metals for reserves. Trump's tariffs and geopolitical uncertainties are likely to amplify the ongoing dedollarization trend among central banks in emerging markets.

In conclusion, the global economy is entering a period of heightened uncertainty, requiring flexibility from central banks. Geopolitical risks may pose challenges to global development. Despite short-term hurdles, the precious metals market will continue to attract investments, especially amid dedollarization and geopolitical instability.

You have already liked this post today

*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.