2025 Gold Futures Index Outlook: From Current Prices to Future Trends

Gold Bull Market: How Long Will It Last?

The strong upward trend in gold futures indices that began last year continues into this year. This is due to increasing global economic uncertainties and escalating geopolitical tensions, which have led to a surge in demand for safe-haven assets. As of July 5th, how high have gold prices risen? In this report, we will comprehensively analyze the current domestic and international gold price trends, the key factors driving price increases, and market outlooks until the end of the year.

The Current State of the 2025 Gold Futures Index

Domestic Gold Prices: Up 43% in One Year

According to the Korea Gold Exchange, domestic gold prices are at 635,000 won per 3.75g of 1 don(. This represents an increase of approximately 43% compared to the same month last year. Looking at the Korea Gold Exchange chart, a continuous upward movement until May can be observed, indicating a structural upward trend rather than a mere short-term fluctuation. However, since May, the upward momentum has somewhat slowed.

) International Gold Market: Approaching Historic Highs

The international gold futures index###XAU/USD( shows an even more impressive rise. As of July 5th, it stands at $3,337.04 per ounce, up about 27% from the beginning of the year and approximately 39% from a year ago. Considering it is early in the third quarter, this is a remarkable increase. Although recent acceleration has slowed, there are no clear signs of a significant decline yet.

Four Major Factors Fueling the Gold Futures Index

The movements of domestic and international gold prices tend to be highly synchronized. Therefore, to accurately interpret the market, it is essential to understand the macroeconomic factors influencing the global gold market.

) 1. Accelerating De-dollarization

Movements to reduce the share of the US dollar in international trade and financial transactions are happening worldwide. China is actively promoting the internationalization of the yuan, expanding the use of yuan in transactions with various countries, and increasing currency swap agreements. India is also actively increasing the proportion of payments made in rupees.

Countries under US sanctions are diversifying assets into gold or other currencies instead of dollars. As the de-dollarization trend accelerates, global demand for gold is bound to grow further.

2. Escalating Geopolitical Tensions

Gold is a classic haven asset###haven asset(, and demand surges as global stability deteriorates. During the 2008 financial crisis, gold prices skyrocketed, and the same was true during the European debt crisis in 2011. In 2020, during the pandemic, gold hit record highs.

Considering current conflicts such as US-China tensions, the Russia-Ukraine war, and Middle Eastern crises, the rise in the gold futures index can be fully explained.

) 3. Concerns Over Economic Weakness in Developed Countries

Inflation issues in the US and concerns about the loss of growth momentum in Europe are driving investors toward safe assets. Gold serves as an inflation hedge and an insurance against economic uncertainty.

4. Central Bank Rate Cuts

When interest rates fall, yields on savings accounts and bonds decrease, reducing the opportunity cost of holding gold. Additionally, rate cuts signal economic weakness, prompting investors to shift funds into safe assets like gold.

The sharp rise in gold prices immediately after the Fed’s 50bp rate cut in September last year is evidence of this.

Where Will the Gold Futures Index Go in the Remaining 2025 Period?

Bullish Scenario: Potential Breakthrough to $3,600

Most financial experts expect gold prices to continue rising through the end of 2025. JP Morgan, in its latest report released on July 1st, raised its year-end target to $3,675 per ounce.

Considering the current price already exceeds $3,300 and there are five months remaining until the end of the year, the likelihood of this forecast materializing is quite high. Besides JP Morgan, Goldman Sachs and Citi Group have already achieved their $3,000 target for this year, and if the current trend continues, further gains are possible.

Bearish Scenario: Low Probability

Barclays and Macquarie forecast a decline to $2,500 by the end of the year. This would require a roughly 25% decrease from current levels, which seems unlikely given the structural upward trend.

Conclusion: Upward Trend Likely to Continue, But Volatility Must Be Managed

Overall, the analysis suggests that the gold futures index is likely to maintain its bullish momentum into the second half of 2025. However, some analysts mention the possibility of a correction around year-end, so appropriate risk management strategies should be in place when investing.

The current gold rally is driven by structural factors such as de-dollarization, geopolitical instability, economic weakness concerns, and rate cuts. The chances of these factors reversing in the short term appear low.