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02.01.2025 01:27 PM
What Awaits Precious Metals in 2025?

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In 2025, many developed countries will continue lowering interest rates, but the pace of these reductions will depend on regional and economic conditions. In the United States, the Federal Reserve plans to act more cautiously than other central banks. The Fed forecasts only two rate cuts this year, fewer than previously expected. This cautious approach stems from the relatively stable U.S. economy and persistent inflation.

Most major banks have lowered their interest rate expectations. Fixed-income analysts at Bank of America agree with the Fed's forecast of two rate cuts. Banking holding company Wells Fargo is slightly more conservative, predicting only one rate cut this year. However, Canadian multinational investment bank TD Securities predicts four rate cuts, estimating that the federal funds rate will drop to 3.50% by year-end. Meanwhile, U.S.-based investment company BlackRock believes Treasury yields will rise by year-end, as the Fed is unlikely to aggressively cut rates.

Not all analysts, however, are confident that the U.S. economy can withstand geopolitical uncertainties and the unintended consequences of policies proposed by President-elect Donald Trump.

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Ahead of his inauguration, Trump threatened to impose trade tariffs on nearly all major global economies. These tariffs would promote domestic production and support the U.S. dollar, but the policy comes with costs and could exacerbate existing inflationary pressures. In short, Trump's presidency implies higher U.S. inflation and weaker global growth. However, if Trump's tariff threats remain just that—threats—the world's economic growth rate, considering high U.S. inflation and migration policies, might slightly underperform its 3% trend.

Banking experts predict that if Trump's tariff plan materializes, its effects will only begin to be felt in Q3 2025. Regarding the Fed's monetary policy and its impact on precious metals, many analysts expect shifting rate expectations to create short-term obstacles and volatility for precious metals. Limited Fed rate cuts will support the U.S. dollar, posing another significant challenge for precious metals.

Nevertheless, analysts in commodities remain confident that gold will surpass $3,000 per ounce by year-end.

Additionally, the correlation between gold and Treasury yields, and even the U.S. dollar, has broken down as central banks continue purchasing large volumes of precious metals for reserves. Trump's tariffs and geopolitical uncertainties are likely to amplify the ongoing dedollarization trend among central banks in emerging markets.

In conclusion, the global economy is entering a period of heightened uncertainty, requiring flexibility from central banks. Geopolitical risks may pose challenges to global development. Despite short-term hurdles, the precious metals market will continue to attract investments, especially amid dedollarization and geopolitical instability.

Irina Yanina,
Especialista em análise na InstaForex
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