Overview for Gold Q3 and Q4 2025
In Q1 and Q2 gold investment demand for the metal was strong with gold rising at a record setting pace of 26% (in US Dollars terms), this was mainly a result of global geoeconomics uncertainty, rangebound rates and a weaker dollar. Indeed, the US Dollar has had its worst start to the year since 1973 and with US Treasuries underperforming, (inflows faltered in April) due to heightened uncertainty in the U.S.A, inflows into gold ETFs* from all regions in the first half of the year was very strong. By the close of business 30th June 2025 total AUM (Assets Under Management) for global ETFs totalled USD 383 Billion up 41%. Total holdings rose by USD 38 Billion equivalent to 3,616t which is the highest month end figure since August 2022.
*ETF or Exchange Traded Fund – allow investors to hold a multiple of underlying assets in this case gold. It is a type of investment fund that allows investors to gain exposure to the price of gold without physically owning the metal. It is essentially a mutual fund that buys and holds gold bullion and investors can buy and sell shares in the fund on a stock exchange.
Second Half of 2025
Analysts in the gold arena suggest that the consolidation of gold in the last few months and with technical indicators showing a pause within the current uptrend that has helped ease overbought conditions has set the stage for a potentially renewed upside. Furthermore, analysts suggest that continued global uncertainty, plus uncertainty with White House policies, (especially tariffs) together with falling interest rates will hopefully maintain investor appetite especially for OTC and ETF transactions. On the central bank front analysts suggest that appetite will remain strong, remaining well above the pre-2022 average of 500 – 600t but staying below previous records.
However, those within the gold arena warn that gold prices are probably going to continue to be elevated, possibly curbing consumer demand and encouraging recycling, thus putting a negative effect on a stronger gold performance. This neatly leads on to the flip side for gold where experts suggest gold could finish the year in a positive aspect but lose between 12% – 17%. Such figures are offered to the background of demonstrable and sustainable geoeconomic and geopolitical conflict therefore reducing the need for hedges such as gold as part of investment strategies, thus encouraging investors to take on more risk. The reduction in risk would according to experts lead to the aforementioned pullback (which is equivalent to the trade risk premium*) would be triggered by a stronger dollar and rising yields would reduce overall investment demand thus leading to outflows from ETFs.
*Trade Risk Premium – The trade risk premium for gold refers to the additional return investors expect to receive for holding gold above the risk-free rate as compensation for the inherent risks associated with investing in gold. These risks can include price volatility, potential lack of liquidity in specific markets, and the possibility of negative correlation with other assets during times of market stress. Essentially, it is the premium investors demand to hold gold instead of safer, risk-free assets such as treasuries or other safe government bonds.
Conclusion
Experts conclude that there are two scenarios regarding the future of gold in Q3 and Q4 of this year. 1. Should global financial and economic conditions continue to deteriorate further, thus applying more negative pressure on geoeconomic tensions which could further aggravate pressure on stagflation, flight to safe haven gold could potentially push the metal 10% – 15% higher. 2. The other scenario according to experts is that if there is across the board major resolutions in current conflicts such as Russia and Ukraine, Israel and Gaza plus Iran (seems fairly unlikely), then gold could well give back the gains made in Q1 and Q2 by as much as 12% – 17%. Given all the factors, analysts within the gold arena suggest that the way forward for the metal will remain dependent on monetary policy, trade tensions (tariffs), inflation and stagflation dynamics, and policy forthcoming from the White House.
