Key Takeaways

• Gold will face "much more modest growth" next year, according to the World Gold Council's 2025 outlook.

• Gold prices have hit multiple record highs this year and the precious metal has notched its best annual performance in a decade.

• A risk to gold prices will be a pause or reversal in the U.S. Federal Reserve's rate-cutting path, the council said.

After hitting multiple record highs this year and notching its best yearly performance in a decade gold is set for slower growth next year, according to the World Gold Council.

Gold prices jumped 28% in the year through November in U.S. dollars, as central bank and investor buying offset slowing growth in consumer demand, especially from China, the council said in its 2025 outlook released Thursday.

“The market consensus of key macro variables such as GDP, yields and inflation—if taken at face value—suggests a positive but much more modest growth for gold in 2025,” the council said.

Gold could gain even more, the council said, if central banks ramp up their acquisitions; or “a rapid deterioration of financial conditions” lead investors to seek out safe-haven assets. Chinese consumers, who have stayed on the sidelines of gold-buying this year as their economy slowed, also could change the balance if they come back in, the council said.

Fed Rate-Cut Pause, Reversal Would Hurt Gold Demand, Says Council

On the flip side, a reversal by the U.S. Federal Reserve of its interest-rate cutting cycle will hurt investors' demand for gold. When rates rise, the yields on lower-risk investments like Treasury bonds can look more favorable when compared with gold.

"Overall, a more dovish Fed will be beneficial for gold, but a prolonged pause or policy reversal would likely put further pressure on investment demand,” the council said.

Along with India, China is gold’s largest market, and Asia makes up more than 60% of annual demand, if central bank buying is stripped out.

Total gold demand in the third quarter exceeded $100 billion for the first time. Few assets have beaten gold in performance this year, apart from bitcoin (BTCUSD), which has surged on Donald Trump's election victory.

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