Gold has emerged as the standout performer among major asset classes in the first half of 2025, registering a stellar 26% gain in US dollar terms, according to the World Gold Council’s latest Gold Mid-Year Outlook 2025.
This remarkable surge was fuelled by a weaker US dollar, rangebound interest rates, and heightened geopolitical uncertainty, all of which contributed to strong investment inflows into gold ETFs, OTC markets, and exchanges. Central banks also continued their gold purchases, adding further momentum.
Looking ahead, the Council’s Gold Valuation Framework outlines three possible scenarios for the remainder of the year:
- Base Case: Gold remains rangebound with a modest upside of 0–5%, driven by cautious rate cuts and continued macro uncertainty.
- Bull Case: A deteriorating economic backdrop—marked by stagflation or recession risks—could see gold rise another 10–15% as investors seek safe havens.
- Bear Case: In the event of widespread conflict resolution and stronger growth prospects, gold could pull back 12–17% due to rising yields, a stronger dollar, and reduced investor hedging.
Notably, the first half of the year saw gold hit 26 new all-time highs and daily trading volumes reached a record $329 billion, with global gold ETF holdings surging 41% to $383 billion. However, elevated prices are also beginning to dampen consumer demand and may spur higher levels of gold recycling.
WGC said that while gold’s fundamentals remain solid, its path forward will be shaped by the interplay of global trade dynamics, inflation trends, and monetary policy shifts.