Exclusive-Gold continues to soar… Will the rise persist, or is a correction looming on the horizon?
Publisher and Editor-in-Chief of Leb Economy, Alphonse Dib
With the continued rise in global gold prices to new record levels, questions are increasing among citizens, analysts, and economists regarding the price direction of the yellow metal will take in the coming period, due to its significant importance in both economic and social life.
In this context, it is not possible to provide definitive answers about the future of gold, as its unstable movement is linked to a wide range of economic and political factors — most notably supply and demand, monetary and fiscal policies, psychological variables, and geopolitical risks.
The sensitivity of the current situation is heightened by the sharp increase in prices over a short period, raising the level of risk associated with a correction or a change in some of the influencing factors — particularly on the political level — amid unexpected developments in the American political landscape involving President Donald Trump.
Factors Behind the Current Rise
It can be said that the rise in gold results from the convergence of several interrelated economic and political factors, the most prominent of which are:
1. Weakness of the dollar and low real yields
Gold is priced in U.S. dollars; therefore, the weakness of the American currency leads to a rise in gold prices in dollar terms. In addition, the decline in real yields on bonds pushes investors to prefer gold as a safer alternative.
2. Inflation and economic uncertainty
When inflation rates rise or are expected to persist, gold is viewed as a hedge that protects against the erosion of purchasing power. Likewise, during periods of recession or crisis, demand increases as gold is considered a safe haven.
3. Central bank policies and gold purchases as reserves
Many central banks — especially those of Russia, China, India, and Turkey — have increased their gold purchases to diversify reserves to mitigate the risks of a weak dollar, providing strong support for prices.
4. Weak supply from mine production
Gold supply is not keeping pace with the rising demand due to geological and environmental challenges and increasing extraction costs, which limits supply and supports prices.
5. Geopolitical tensions and global crises
Wars, conflicts, and strained international relations prompt investors to move capital toward gold as a safe haven.
6. Institutional investment and gold funds
Capital inflows into gold-linked index funds increase financial demand, alongside the actual demand for jewellery, particularly in Asian markets.
Outlook for the Coming Phase
Based on current data, several factors support the continuation of the bullish trend into 2025 — most notably the weakness of the dollar, stable interest rates, global economic volatility, and sustained strong demand from central banks.
Some investment banks, such as Deutsche Bank, have raised their forecasts for the price of gold to $4,000 per ounce by 2026.
Potential Challenges
However, not every factor favors gold. Certain elements may constrain its rise, including:
A rebound in the strength of the U.S. dollar.
Improvement in global economic growth and rising returns on stocks and other risk assets.
Stabilization of inflation and a balancing of supply and demand.
Conclusion
In conclusion, the general trend for gold remains upward in the medium to long term, supported by ongoing inflationary pressures, geopolitical risks, and monetary easing in many economies.
However, gold is not immune to fluctuations and corrections. Any economic surprises or shifts in monetary policy may limit the upward trajectory or lead to temporary declines in its value.
One must also not overlook the impact of “Trumpian surprises,” which may significantly affect the global economy — and gold in particular.
Ultimately, given the multiplicity and interconnection of influencing factors at this stage, it can be said that the long-term path for gold remains positive — albeit with the potential for sudden developments that could overturn current forecasts.
One analyst observes:
“After gold touched record levels approaching $4,000 per ounce, anyone wishing to invest in it must view it as a long-term investment, because over the long run, gold is the real winner.”
