More Stories

Informist, Tuesday, Feb. 25, 2025

MUMBAI – A surge in investment demand could push the price of gold towards $3,000 per ounce, Kitco.com said in a report. However, some analysts note that the precious metal's slowing momentum suggests risks of a correction are growing, the report said.

According to data from the World Gold Council, 48 tonnes of gold, valued at $4.6 billion, flowed into North America-listed gold-backed exchange-traded funds last week, marking the biggest one-week surge since April. The renewed investment demand came as gold prices posted their eighth consecutive weekly gain while setting a new record high, the report said.

"At 84.2 million ounces on Feb. 20, total known gold ETF holdings have recovered to the highest level since the start of 2024," the report quoted Mike McGlone, senior commodity strategist at Bloomberg Intelligence, as saying. "It's not surprising to expect a shift to gold ETF inflows in 2025, especially if there is a bit of a reversion in the rapidly rising US stock market and high interest rates," McGlone said.

Gold prices usually struggle in a high interest rate environment because of heightened opportunity costs as a non-yielding asset. However, prices have rallied around 12% in the first two months of 2025, even though the US Federal Reserve has said it is in no hurry to cut interest rates, the report said.

Western investors are shifting to ETFs to hedge against economic disruption or inflation caused by tariff threats, and the investment demand has room to move higher, the report quoted Chris Mancini, associate portfolio manager of the Gabelli Gold Fund, as saying. "Gold is serving as a hedge against the dollar and other currencies losing their purchasing power," Mancini said. "Tariffs might accelerate this process as the prices of goods across the world increase. Also, if global central banks (including the Fed) reduce interest rates or print money as a way to combat economic weakness, prices will likely rise, increasing gold's appeal to investors."  End

US$1 = INR 87.21

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Ashutosh Pati

Edited by Rajeev Pai

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.