The case for gold to not only reach but breach its all-time record high this year seems exceedingly likely. Gold futures have already reached $3500 per ounce, with the record closing price of $3454.60 reached on Monday, April 21, 2025. That being said, gold futures basis, the most active August 2025 contract, lost $42 today and settled for the week at $3333.60. Even with today’s sharp decline, gold managed to eke out a nominal gain on the week of $18, or +0.54%.
Physical or spot gold traded to its highest value on Tuesday, April 22, when it traded to an intra-day high of $3500.20. Today spot gold also traded lower on the day by approximately $40 and is currently fixed at $3312 and change.
Even though both physical gold and its derivative futures contract are about $200 below their record highs that occurred in April, there is a case to be made that both will not only retest $3500 per ounce but close out the year well above that price point. Our assessment is that gold by the end of the year will close out anywhere between $3600 and $3700 per troy ounce.
The new all-time highs in gold will be the direct result of US trade policies, geopolitical tensions, and continued accumulation by central banks worldwide. While the potential for a global trade war could be avoided, tariffs implemented by President Trump are expected to be higher than in the past, which will continue to elevate the economic uncertainty that stems from these actions.
Central banks have been accumulating gold and adding to their reserves now for the fourth straight year. According to Metals Focus, it is likely that collectively the central banks worldwide will accumulate an additional 1000 metric tons of gold in 2025, as central banks continue to shift dollar assets into the precious yellow metal.
Strong central bank demand, according to the Metals Focus report, will occur as "Diversification away from the U.S. dollar, whether from a portfolio or reserve management perspective, or for geopolitical reasons, remained the key driver."
Earlier in the week, physical gold traded to a high just a few dollars shy of $3400 per ounce. Gains that occurred during the first part of the week are the result of accusations by President Trump that China had violated a temporary agreement with the United States. This threatened to reignite a trade war between the United States and its largest trading partner.
However, over the last two trading days, it has declined significantly. This seems to be the result of a comment made by President Trump in which he discussed a trade call with China’s President Xi. His statement pressured gold prices lower as the safe-haven appeal contracted amid indications that the United States and China would reenter negotiations with a deeper understanding of how to settle the current trade dispute.
That being said, it is likely that the fundamental events cited at the beginning of this commentary will continue to be highly supportive of gold throughout the rest of the year, taking the precious yellow metal to yet another all-time record high by the end of 2025.
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