Gold likely to be range-bound in H2 of 2025, says WGC analysis
Gold may move sideways with some possible upside —increasing an additional 0-5 per cent in the second half of 2025, suggests an analysis of the World Gold Council (WGC) on the precious metal.
“Our analysis, based on our Gold Valuation Framework, suggests that, under current consensus expectations for key macro variables, gold could remain rangebound in H2, closing roughly 0–5 per cent higher than current levels, equivalent to a 25–30 per cent annual return,” it said in its “Mid-Year Outlook 2025”.
The analysis is based on macro-predictions of economists and market participants. “However, the economy rarely performs according to consensus,” said the WGC, a body of gold producers.
Up 26% in 2025
“Gold enters the second half of 2025, coming off an exceptionally strong start to the year —up 26 per cent —shaped by a weaker US dollar, persistent geopolitical risk, robust investor demand, and continued central bank purchases.
On Wednesday, spot gold ruled at $3,341.29 per ounce. US gold futures were quoted at $3,348.20. In India, gold (999 fineness) was quoted at ₹97,916 per 10 gm. On MCX, gold futures expiring in August ended the first session at ₹97,400 per 10 gm.
“While some of these drivers are expected to persist, the path forward remains highly dependent on multiple factors, including trade tensions, inflation dynamics, and monetary policy,” said the WGC.
If economic and financial conditions deteriorate, exacerbating stagflationary pressures and geoeconomic tensions, haven demand for the yellow metal could significantly increase. This could push gold 10-15 per cent higher from current prices.
Unlikely, but…
“On the flipside, widespread and sustained conflict resolution —something that appears unlikely in the current environment —would see gold give back 12-17 per cent of this year’s gains,” it said.
Geo-economic uncertainty, inflation and dollar-related pressures have helped gold to be a net beneficiary. Though the fundamentals remain strong, the gold price has already captured part of these dynamics, it said.
In turn, sustainable conflict resolution and continued rising stock prices could lure more risk-on flows and limit gold’s appeal, the WGC said, adding that to assess these conditions, it looked at the precious metal’s key drivers – economic expansion, risk and uncertainty, opportunity cost, and momentum
Stating that global GDP will move sideways and remain below trend in the second half, it said world inflation is likely to rise above 5 per cent in the second half as the global impact of tariffs becomes more pronounced, with the market expecting US CPI to reach 2.9 per cent.
Caution the watch word
“In response to this mixed economic backdrop, central banks are expected to begin cautiously lowering interest rates towards the end of Q4, with the Fed expected to cut rates by 50 basis points by the end of the year,” the WGC said.
The trade environment will likely be volatile despite advances in negotiations over tariffs, while the overall geopolitical tensions, particularly between the US and China, are likely to remain elevated, contributing to a generally uncertain market environment, it said.
The gold producers’ body said technical indicators suggest that the precious metal’s consolidation phase over the past few months is a healthy pause in a broader uptrend. It will help ease the previous overbought conditions and potentially set the stage for renewed upside.
“Falling interest rates and continued uncertainty would maintain investor appetite, particularly via gold ETFs and OTC transactions. At the same time, the central bank demand is likely to remain robust in 2025, moderating from its previous records while staying well above the pre-2022 average of 500-600 tonnes,” the WGC said.
Curbing demand
However, elevated gold prices are likely to continue to curb consumer demand and potentially encourage recycling. This would act as a damper to stronger gold performance, it said.
Gold could also be partly supported by contributions from new institutional investors, such as Chinese insurance companies. A more volatile geopolitical and geoeconomic scenario could push gold significantly higher, particularly if more substantial stagflation or recession risks materialise and investor appetite for safe-haven assets grows.
On the flip side, while seemingly unlikely given the current environment, widespread and sustained global trade normalisation would bring higher yields and resurgent risk appetite, challenging gold’s momentum. Gold could also be tested by a visible deceleration in central bank demand beyond current expectations.
“In all, given the intrinsic limitations of forecasting the global economy, we believe that gold, through its fundamentals, remains well-positioned to support tactical and strategic investment decisions in the current macro landscape,” the WGC said.
Published on July 16, 2025
