Gold Will Shine in Bearish Year Ahead for Commodities, ING Says

As we approach 2025, the commodities market is expected to face a bearish year, but one asset is poised to shine: gold. ING Research predicts that gold will outperform other commodities due to its safe-haven status and strong demand from central banks and investors.

Geopolitical tensions and uncertainty will likely drive gold's performance in 2025. ING Research expects gold to benefit from its safe-haven status, as investors seek refuge in the precious metal during times of economic and political turmoil. Central banks have been net buyers of gold for the past two years, with 2023 seeing the second-highest annual purchase in history at 1,037 tonnes. This trend is expected to continue in 2025, with 29% of central bank respondents intending to increase their gold reserves in the next 12 months.

Central bank buying and ETF inflows will significantly impact gold prices next year. Central banks have been net buyers of gold for the past two years, with 2023 seeing the second-highest annual purchase in history at 1,037 tonnes. ING Research expects this trend to continue in 2025, with 29% of central bank respondents intending to increase their gold reserves. This strong demand, driven by geopolitical tensions and economic uncertainty, will support gold prices. Additionally, global gold ETFs have seen inflows for six months in a row, with North America and Asia leading the way. As gold prices gain, investor holdings in gold ETFs typically rise, further boosting demand and prices.



Gold's safe-haven status, driven by geopolitical tensions and economic uncertainty, contributes significantly to its resilience in a bearish commodities market. Central banks' increased gold purchases, totaling 1,037 tonnes in 2023, reflect this trend. Additionally, gold ETFs have seen inflows for six months, with North America and Asia leading the way. This demand, coupled with lower borrowing costs due to US rate cuts, supports gold's positive momentum. Despite a slowdown in Chinese purchases, the People's Bank of China's year-to-date total remains strong, with 694 tonnes.

In conclusion, gold is expected to shine in a bearish year ahead for commodities, driven by its safe-haven status, strong central bank demand, and robust ETF inflows. As geopolitical tensions and economic uncertainty persist, investors can expect gold to remain a reliable and resilient investment option in 2025.