Gold currently fuels its surge, and Joe Cavatoni predicts a catalyst for further growth to a new height.
The gold market is expected to face significant influences in the second half of 2025, according to both Georgia Williams and Joe Cavatoni, renowned market analysts.
US Economic Conditions and Gold Prices
Joe Cavatoni, a senior market strategist at the World Gold Council, predicts that the gold market will be heavily influenced by the state of the US economy. He emphasises that clarity around the US economy is critical for gold's next price breakout. Market risk and uncertainty, especially stemming from the US economic outlook and Federal Reserve policies, are currently driving gold demand. Cavatoni notes that the market awaits signals such as interest rate cuts or changes in Fed leadership (Jerome Powell's term ends in 2026), which could act as catalysts for gold's next leg higher.
Impact of Tariffs on Gold Market
Cavatoni also discusses the potential impact of tariffs on the gold market in the second half of 2025. While the search results do not explicitly mention tariffs' direct impact on the gold market in H1 2025, given that tariffs influence broader economic growth and inflation expectations—both key gold price drivers—the uncertainty created by trade policies can indirectly bolster gold's safe-haven appeal. Cavatoni's focus on geopolitical and economic uncertainty aligns with this general understanding of tariffs' market impact.
Role of Central Bank Allocations in Gold Market
Central bank allocations are considered crucial by both Georgia Williams and Joe Cavatoni in the context of the gold market. Central banks have been consistent and strategic buyers of gold for an extended period, with eight straight months of net purchases reported by Cavatoni. This persistent buying supports a strong price floor (around the $3,300 per ounce level) and contributes to ongoing demand regardless of short-term market fluctuations. This institutional and central bank accumulation underpins gold price stability and reduces the risk of sustained price corrections.
Strategic Allocation for Gold
Georgia Williams suggests maintaining a strategic allocation for gold, given the market's potential volatility. Cavatoni concurs, highlighting the importance of a well-diversified portfolio that includes gold as a safe-haven asset.
In summary, both Georgia Williams and Joe Cavatoni see gold's price in the second half of 2025 as supported by ongoing market risks and uncertainties surrounding the US economy and monetary policy, with central bank buying providing a solid demand foundation. The outlook is cautiously optimistic, expecting range-bound prices with potential upside depending on economic clarity and Fed actions.
Securities Disclosure: Georgia Williams has no direct investment interest in any company mentioned in this article.
[1] World Gold Council [2] Federal Reserve [3] Bloomberg
In the context of the gold market, both Georgia Williams and Joe Cavatoni foresee investments into gold as a crucial aspect of a well-diversified business portfolio due to the potential volatility in the market. The state of the US economy, particularly the US Federal Reserve policies, is expected to heavily influence finance decisions related to gold investing.
