Investing.com– Gold is expected to retain its appeal as a safe-haven asset in 2025 as elevated geopolitical and economic uncertainties, coupled with strong central bank buying, are expected to support prices, ANZ analysts said.

While headwinds from a firm U.S. dollar and Federal Reserve rate cuts persist, ANZ sees moderate returns of around 10% in the yellow metal, with prices potentially reaching record levels of $2,900 per ounce next year, ANZ analysts said in a note.

Geopolitical risks—such as increasing tensions in the Middle East and challenges stemming from Trump’s trade policies—will likely keep gold demand buoyant, analysts said.

ANZ’s outlook also highlights the role of China and India in driving demand. China’s economic support measures and volatile yuan are expected to boost investment demand for gold bars, coins, and ETFs. Meanwhile, India’s gold consumption should remain solid, bolstered by growing incomes and reduced import duties, with a 9% increase in jewellery demand anticipated, according to ANZ.

On the supply side, central banks will remain active buyers, though at a slower pace. ANZ forecasts annual gold purchases by central banks to be around 850 tons in 2025, down from 950 tons in 2024, as countries like Russia, China, and India stockpile reserves.

ANZ analysts said gold may face resistance at $2,780-$2,790 per ounce but could rally toward $2,900 if these levels are breached. However, price momentum is expected to depend heavily on U.S. monetary policy and geopolitical developments.

This steady yet cautious optimism underscores gold’s role as a hedge against rising macroeconomic risks, providing a “modest shine” in the upcoming year.