World Gold Council: Gold prices may be stuck in a sideways trend in the second half of the year, with potential increases of up to 15% under the risk of stagflation
The World Gold Council pointed out in its mid-year outlook report that if economic forecasts are accurate, gold prices may fluctuate sideways in the second half of the year, with a potential increase of up to 15%. If the economic and financial environment worsens and stagflation pressures intensify, safe-haven demand may drive gold prices up by 10%-15%. Despite strong fundamentals, some favorable factors have already been reflected in gold prices. In June, the U.S. CPI rose by 2.7% year-on-year, and gold futures slightly fell to USD 3,329.80 per ounce
According to the Zhitong Finance APP, the World Gold Council pointed out in its mid-year outlook report released on Tuesday that if economists and market participants' predictions about the macroeconomy are accurate, gold prices may experience a sideways fluctuation in the second half of this year, with some upward potential. However, historical experience shows that economic performance rarely aligns completely with consensus forecasts.
The report analyzes that if the economic and financial environment deteriorates, and stagflation pressures intensify, coupled with escalating geopolitical tensions, safe-haven demand may drive gold prices up by 10%-15%; conversely, if global conflicts are widely and sustainably resolved, gold may give back 12%-17% of its gains this year, although this possibility is relatively low in the current environment.
Regarding central bank gold purchases, the World Gold Council believes that global central bank demand for gold will remain strong in 2025, although the scale of purchases may decline from previous record levels, it will still be well above the average of 500-600 tons per year before 2022.
The report emphasizes: "Pressure related to the dollar may persist, and discussions about the end of the 'American exceptionalism' may become a focus for investors. Overall, these conditions make gold a net beneficiary. Although the fundamentals remain strong, some favorable factors have already been reflected in the current gold prices."
On Tuesday, key U.S. data showed that inflation rose as expected last month, which may indicate that businesses have begun to pass on tariff costs to consumers. As a result, gold futures prices fell slightly.
In June, the U.S. Consumer Price Index (CPI) rose by 2.7% year-on-year, an increase from 2.4% in May, and in line with economists' expectations. Generally, gold performs best in a low-interest-rate environment, making it more attractive compared to interest-bearing assets like bonds.
The main gold futures contract for July delivery on the New York Mercantile Exchange fell by 0.6%, closing at $3,329.80 per ounce; the main silver futures contract for the same delivery period fell by 1.6%, closing at $37.834 per ounce
