Gold maintains growth amid soft dollar and Fed rate cut expectations
Gold continues to rise due to a weakening dollar and expectations of a Fed rate cut, with prices potentially reaching $3,700 by the end of 2025.
The gold market continues to show steady growth: as of July 21, 2025, the spot price rose to $3,368.39 per ounce, while US gold futures are trading at $3,376. The upward momentum is supported by a weakening dollar, expectations of a Federal Reserve rate cut, and ongoing geopolitical tensions.
Analysts note that unlike the sharp speculative spikes of previous years, the current gold rally appears more balanced. It is driven by macroeconomic expectations and active purchases by central banks. Investors are also continuing to seek safe-haven assets amid slowing global economic growth.
Central banks boots demand
According to the World Gold Council, 95% of central banks plan to increase their gold reserves over the next 12 months. This trend is especially pronounced in emerging markets seeking to reduce reliance on the US dollar. Since the beginning of the year, total purchases could reach 1,000 tons, potentially making 2025 one of the most active years for central bank demand.
In addition, investors are closely watching the upcoming introduction of new trade restrictions between the US and China. The market is pricing in potential instability into both spot and ETF gold instruments.
Factors supporting price growth
The market continues to respond to several gold-positive factors, including:
- Weakening dollar index amid expectations of a Fed rate cut
- Anticipated pause in the European Central Bank’s tightening cycle
- Rising demand for physical gold in India and China
- Centralized gold purchases by state regulators
- Growing interest in gold from ETF funds
Each of these factors may have limited influence on its own, but together they form a solid foundation for price growth.
Outlook and risks
Despite the positive trend, analysts advise caution. Future gold price movement will depend on the outcome of the Fed’s August meeting, currency market sentiment, and potential geopolitical escalations. Forecasts vary: in the base scenario, prices may rise to $3,400–3,450, while in an optimistic scenario they could reach $3,700 by the end of 2025, according to Goldman Sachs.
Nevertheless, short-term corrections remain likely, especially if strong economic data comes out of the US. Fundamentally, however, gold continues to be seen as one of the key safe-haven assets amid rising global risks