The report highlights that the ongoing rate cuts by major central banks should keep driving up gold and silver prices amid ongoing geopolitical tensions and economic uncertainties.

Gold and silver prices are projected to rise in 2025, while platinum group metals (PGMs) may not follow a consistent trend due to differing industrial demand, according to Heraeus Precious Metals in a December 2024 report.

The report, titled “Precious Forecast 2025”, notes that central banks are likely to continue easing monetary policy this year, which should support economic growth and push gold prices higher.

Historically, gold prices tend to fall when interest rates rise, as higher rates make bonds more attractive to investors. Conversely, lower interest rates decrease bond yields, allowing gold to regain its appeal as a safe-haven asset, especially with ongoing geopolitical tensions. Trump’s return to power could ease geopolitical tensions if he can help solve the Russia-Ukraine puzzle; however, trade tensions could escalate.

The FED's rate-cutting cycle, combined with a high chance of recession in the US, could weaken the dollar and lead investors to seek gold as a store of value, further boosting its price.

Central bank purchases of gold are expected to remain strong in 2025, providing solid demand for the metal even if jewelry demand declines due to price sensitivity.

Heraeus Precious Metals anticipates gold prices will stand between $2,450 and $2,950 per troy ounce this year, compared to $2,789 per ounce last year.

For silver, the anticipated US recession and continued expansionary monetary policy are bullish indicators. Strong demand from the photovoltaic industry should also support prices despite a projected increase in mine production by 10 million troy ounces compared to 2024. Consequently, silver prices are expected to range between $28 and $40 per troy ounce in 2025, up from $22.21 to $34.47 per ounce in 2024.

A varying industrial demand across sectors

Platinum prices are expected to be supported by a world market deficit in 2025. The deficit is projected to widen as demand increases faster than supply can grow. Industrial needs for platinum are set to rise, pushing total demand over 7.6 million troy ounces while mine production is expected at 5.4 million troy ounces. Prices for platinum are forecasted between $850 and $1,220 per troy ounce.

Palladium prices may decline due to a 2% rise in primary supply and decreased demand in 2025. The automotive sector typically consumes over 80% of palladium production but is losing ground to electric vehicles. As a result, palladium prices are likely to drop slightly compared to 2024, ranging from $800 to $1,200 per troy ounce.

Heraeus Precious Metals holds a negative outlook on rhodium due to its dependence on automotive demand. Heraeus anticipates a smaller deficit this year, due to improved supply and modest demand growth. Rhodium prices should range from $4,400 to $5,400 per troy ounce by 2025.

Ruthenium prices are anticipated to rise slightly year-on-year to between $425 and $575 per troy ounce in 2025 due to increased demand from electronics and chemicals sectors, alongside a 2% drop in primary production.

The outlook for iridium remains stable. The anticipated surge in demand for iridium used in electrolyzers has not yet occurred due to green hydrogen's lack of competitiveness with other energy sources. Therefore, iridium prices are expected between $4,900 and $5,600 per troy ounce in 2025.

Walid Kéfi

Edited by M.F. Vahid Codjia