Investing in gold in 2025–what can traders expect?

Gold markets for CFD traders

Gold is the most traded precious metal, with everyone from long-term investors to CFD day traders involved in the market. Normally viewed as a safe-haven asset, gold is supposed to perform well when the equity market sells off. The last three years are an exception to this pattern: gold began a major bull run in October 2022 that has continued into 2025. Over the entire bull market, the yellow metal gained over 70%, a strong performance that coincided with a major equity rally. Traders and investors alike are looking closely at gold and other precious metals like platinum to see if they can sustain this performance going forward.

Why does gold matter?

For many people and for much of history, gold is synonymous with wealth. Often traded as one financial asset among many, gold is still viewed as the ultimate store of value and safe haven against currency or financial asset depreciation. Many gold currencies originally derived their value solely in terms of the weight of the gold (or sometimes silver) contained in the coin. For most of the twentieth century, the world economy was based on a gold standard, with the US dollar and other major currencies freely exchangeable with the yellow metal. For multiple reasons, including the failed efforts of European and American bankers to maintain stable gold prices, this system collapsed in 1971, sparking a dramatic rise in the price of gold as investors rushed into a market that had been artificially suppressed for many years.

Who owns the most gold? Who trades gold?

To understand a market, you need to know something about its participants. In gold’s case, trading takes place worldwide, but the largest single centre is the over-the-counter (OTC) market in London. Gold futures trading takes place in significant volumes in New York, on the COMEX exchange, while significant spot trading centres exist in Shanghai and Zurich, with the latter of critical importance to the storage and shipment of physical gold. Gold CFD trading makes up a large derivatives market, where traders can speculate on the price of gold without owning the underlying asset.

Largest gold holders

The US government has long been the most important owner of physical gold and controls the largest single stockpile at around 15% of all national gold reserves. The next largest is Germany, followed by Italy, France, and the International Monetary Fund. National governments and international organisations hold gold as a safe-haven reserve, a store of value in case they need to intervene in currency markets, and as a speculative investment. Since 2008, the reserve market has experienced steady demand, due to many nations’ desire for increased gold reserves.

Gold trading

Gold trading is a diverse market with liquidity from multiple sources. Major gold traders include investment banks, national governments, and private individuals. Gold is especially popular with retail traders because it is easy to trade, can be stored securely, and is highly liquid. In comparison with other commodities, including precious metals such as silver and platinum, gold is easily convertible to cash. The liquidity of gold means it is sometimes traded as a currency pair against the USD. Gold CFD traders often take short-term views on the price of the yellow metal, sharing in the price action without owning the underlying asset. Depending on your account type, ADSS offers significant leverage to gold CFD traders who want to magnify the impact of price moves on their portfolio.

2024 gold trends

2024 saw the continuation of long-standing gold trends, with a sustained rally leading to all-time price highs. Gold began 2025 at $2,640 per ounce, up from $2,067 in January 2024. Key drivers of this sustained bull market included geopolitical tensions, especially growing worries over Trump’s tariffs, fund managers hedging equity portfolios, and expectations of a rate cut by the Federal Reserve. [A1] Unusually, this strong rally in gold has taken place against a backdrop of equity market strength, with risk-on assets performing well across the board.

Gold price trends for 2025

Gold price trajectories divide financial analysts. From late 2024 through the first months of 2025, reports from major banks and research houses claimed gold was on its way to $3,000 by year end, citing investor nervousness about US pro-growth policies, continuing inflation, and other risks to global equities. Analyst reports are speculative, and no one can say for sure how prices will react to that overall market environment, or what that environment will be like. For gold CFD traders, short-term price moves tend to be more important than the long-term view. That said, trading in the direction of the longer-term trend is always a smart idea, so there are some reasons for traders to look towards long signals in their technical strategies.

Trump tariffs and trade wars

Since beginning his term in office, Trump has followed through on long-standing threats to use tariff action against trading partners who export more to the US than they import. Via executive order, the US president has imposed heavy tariffs on steel, aluminium, neighbouring Canada and Mexico, and imposed a new 10% tariff on China. The US has also threatened other unequal trading partners with tariff action if they do not negotiate, either on trade or other issues important to the US government. These actions have a direct impact on gold prices: increased trade barriers typically lead to greater market volatility, with stock markets and forex markets adjusting to new realities. This uncertainty tends to push investors towards safe-haven assets, above all gold. Tariffs may also increase domestic prices in the US, leading to inflation, which again may cause some investors to rotate into gold as an inflation hedge. Finally, gold has historically experienced an inverse correlation with the USD, which could see selling pressure if inflation continues to rise in 2025. All of these factors are potential tailwinds for the yellow metal.

Eyes on the Federal Reserve

The performance of gold in 2025 depends on multiple factors, but one of the most important is rate decisions from the Federal Reserve. Rate cuts, or a slow progression of rate rises, is normally considered a positive sign for gold prices, whereas aggressive rate hikes will put pressure on non-interest yielding assets. Lower interest rates can boost gold prices because they reduce the opportunity cost of holding gold; since savings accounts and bonds yield less interest, it matters less that gold is not an income-generating asset. The Fed may decide to raise rates at an increased tempo if inflation or other economic indicators demand it, increasing the returns of income-generating assets and so making gold less attractive to investors. This scenario could spell trouble for gold’s price trajectory.

Technical signals and correlation

At the end of 2024, gold’s rally cooled off slightly before returning to record highs in January 2025. So far, gold has moved in step with the S&P500, exhibiting a strong positive correlation, briefly selling off in January with US equities before staging a recovery. An interesting question for the rest of 2025 is whether this correlation can hold. CFD traders will need to look closely at technical signals, including momentum indicators, to time their entry and exit points for any trades. After a dramatic 2024, with prices hitting forty all-time highs over the course of the year, 2025 will be an important year for the yellow metal, and traders must pay close attention to both macroeconomic factors, interest rates, and technical signals.

Conclusion: another exciting year?

Gold’s remarkable performance in 2024 caught the attention of investors and traders worldwide. While past performance cannot guarantee future returns, the fundamentals supporting gold prices remain compelling. For CFD traders, gold’s increased volatility and strong technical trends present opportunities for both long and short positions. Physical gold continues to attract institutional investors seeking portfolio hedges, while gold CFD trading offers retail traders a way to participate in price movements without holding the underlying asset or paying the costs of storage. Key 2025 trends to watch include interest rates, geopolitical events, and broader market sentiment. Whatever happens, 2025 could be another important year for gold markets. As always, traders should remain vigilant, since the current unusual correlation with equity markets might not persist, and the Federal Reserve’s policy decisions could dramatically impact trading conditions. Whether investing in gold directly or trading gold CFDs, a careful analysis of both technical and fundamental factors remains essential for success.

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