Gold price projections by HSBC elevated for 2025 and 2026.
In a recent report, global banking giant HSBC has raised its gold price forecasts for 2025 and 2026, indicating a notably bullish outlook for the precious metal. The bank now anticipates the **2025 average gold price to be $3,215 per ounce**, up from $3,015 previously, and **$3,125 per ounce** for 2026, an increase from $2,915. Year-end gold prices are expected to be **$3,175 per ounce in 2025** and **$3,025 per ounce in 2026**[1].
The raised forecasts are attributed to several key factors:
1. **US Dollar Decline:** The US dollar index has seen a significant drop of 10.8% in the first half of 2025, marking its worst performance since the 1970s. This decline is primarily driven by fiscal concerns such as rising US government deficits, ongoing trade uncertainties, and market anxieties about US economic stability. A weaker dollar tends to make dollar-denominated commodities like gold cheaper for holders of other currencies, supporting higher gold prices[2].
2. **Economic Uncertainty and Monetary Policy:** Global economic uncertainty, including inflation concerns and evolving central bank policies, is bolstering gold’s appeal. Central banks, including the Federal Reserve, have paused or signaled potential easing of interest rates. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, increasing its attractiveness. Market expectations include possible Fed rate cuts later in 2025 if inflation remains contained and the economy weakens[3].
3. **Geopolitical Risks:** Ongoing geopolitical tensions, such as instability in the Middle East and major political events, add to gold's demand as a safe-haven asset. Additionally, central banks in countries like China and India continue to accumulate gold reserves amid changing global alliances[3].
HSBC also notes that gold prices above $3,000 reinforce gold's role as a safe haven and effective portfolio diversifier. The bank suggests that gold purchases could increase should gold correct nearer to $3,000[1].
However, HSBC has lowered its Brent price forecasts due to trade tensions and sluggish oil demand[1].
Meanwhile, the U.S. Senate Republicans are still trying to pass President Donald Trump's tax cut and spending bill, which is expected to add $3.3 trillion to the nation's debt pile[4]. At 1146 GMT on Tuesday, spot gold was trading at $3,348.50 per ounce[4].
[1] HSBC Global Research, "Gold: The New Safe Haven," 2025. [2] Bloomberg, "US Dollar Decline Boosts Gold Prices," 2025. [3] Reuters, "HSBC Forecasts Bullish Gold Outlook," 2025. [4] CNBC, "Gold Prices Soar as U.S. Senate Debates Spending Bill," 2025.
- The increased gold price forecasts for 2025 and 2026 by HSBC may encourage more investors to include gold in their portfolios, given its potential as a safe haven and effective diversifier, especially with prices above $3,000.
- Despite the bullish outlook on gold, HSBC has lowered its Brent price forecasts due to ongoing trade tensions and sluggish oil demand, indicating a possible risk for investments in the oil market.
- The potential passing of President Donald Trump's tax cut and spending bill, which could add $3.3 trillion to the nation's debt pile, might increase the overall risk in the finance sector, potentially influencing both gold trading and investments.
