Jun 2, 2025

Gold is not in a bubble! Prices to hit new highs in second half - Metals Focus

Kevin

GoldPrecious Metals

While gold prices have consolidated above $3,000 an ounce for the past month, investors have not taken their eyes off April's all-time highs. According to one research firm, it is only a matter of time before that level is tested and broken.

 

Gold still has plenty of momentum to push higher in 2026, according to Metals Focus' flagship precious metals report, Gold Focus 2025. In its annual report published Thursday, analysts at the British research firm said they expect gold prices to reach a record annual average of $3,210 this year, with new highs likely in the second half of the year.

 

Philip Newman, Managing Director at Metals Focus, said it's hard to envision a scenario that could derail this new bull market. He added that, although it's not part of their official estimates, he expects the rally to continue through 2026.

 

He emphasized that what makes 2025 unique is that investors are only now starting to pay real attention to the market. While gold has been in a solid uptrend since 2023, demand has largely been driven by central bank purchases, with most investment coming from Asia—especially China.

 

Newman added that investors only turned decisively bullish during the fourth quarter of last year and into this year.

 

"We have seen significant growth in investment demand this year, but there is still a lot of money on the sidelines. This isn't a bubble. There is a lot of solidity in this market," he said.

 

Although economic uncertainty continues to ripple through global financial markets, Newman said a major factor driving gold investment is the shifting perception of the U.S. dollar.

 

While the U.S. dollar remains the ultimate safe haven, Newman pointed out that trade uncertainty and the government's unsustainable debt levels have shaken market confidence, prompting investors to seek safety and diversification in gold.

 

He also warned that faith in the U.S. dollar is beginning to erode, and there are real risks that the U.S.-led global trade war could push the global economy into a recession or even stagflation, as consumer prices continue to rise.

 

While Metals Focus forecasts record highs for the second half of this year, Newman said a more telling feature of this new bull market is the analysts' limited downside expectations.

 

"For our base case, we've significantly raised it because we think there's just more interest from investors. We expect to see much broader participation by investors, so that's lifted the floor quite considerably," he said.

 

In addition to robust investment demand, Newman said central banks are expected to remain key players in the gold market. Metals Focus projects that central banks will once again purchase more than 1,000 tonnes of gold this year—for the fourth consecutive year.

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