Gold possesses both financial and commodity attributes, and amidst unprecedented changes not seen in a century, its financial attributes have continued to stand out.
On July 16, Juan Carlos Artigas, Chief Executive Officer of the Americas and Global Head of Research at the World Gold Council, shared his thoughts on the “Outlook for the Global Gold Market”. He noted that although gold prices have recently experienced volatile corrections, gold remains a major asset for global allocation. The high-risk environment and low interest rates will provide positive support for the upward movement of gold prices.
In the first half of the year, gold prices experienced significant volatility and corrections from high levels.
In late January, the international gold price surpassed historical highs more than 12 times, reaching a record high of $5,405/oz (London Bullion Market Association PM Price), but then dropped dramatically in June to a low of $4,002/oz (London Bullion Market Association PM Price). Data shows that the international gold price has increased by about 70% cumulatively in 2025. Over a longer timeframe, in the past 12 months, gold has remained one of the world’s best performing assets, and its long-term allocation value continues to stand out.
According to Artigas, this round of gold price volatility and correction is primarily due to a combination of factors such as geopolitics, the performance of the US dollar, changes in interest rates, and changes in the stock market.
Currently, increased global geopolitical uncertainties have directly driven repeated fluctuations in the demand for gold as a safe haven, leading to alternating phases of rises and declines in gold prices. The strength or weakness of the US dollar is one of the core factors affecting the price of gold. At the beginning of this year, the US dollar depreciated significantly, and gold prices surged accordingly. Subsequently, when the US dollar regained strength, it became an important bearish factor for gold. Changes in monetary policies in major economies such as the US and Europe directly affect the holding cost of gold assets, thus impacting capital allocation and price volatility. The current heated US stock market, among others, has caused large flows of funds out of alternative assets and into equity markets, resulting in a clear diversion of capital away from gold and further intensifying gold price volatility and adjustments.
Juan Carlos Artigas, Chief Executive Officer of the Americas and Global Head of Research, World Gold Council
Market performance has clearly shown that gold has become a global asset. Gold prices are no longer solely influenced by European and American markets and Fed policies, but are also affected by demand from Asian markets and global central bank reserve policies.
Regarding the performance of the gold market in the second half of the year, Artigas provided an analysis based on the World Gold Council's analytical framework, which includes four key drivers: economic expansion, risk and uncertainty, opportunity cost, and momentum.
From an economic expansion perspective, global economic growth is highly positively correlated with gold consumption, investment, and industrial demand. With the rapid development of emerging technologies such as artificial intelligence, demand for gold in technology is increasing, while consumer demand, investment demand, and industrial demand have become important supports for gold prices.
From the risk and uncertainty perspective, increasing global geopolitical risks, macroeconomic volatility, and policy uncertainty are heating up market demand for safe haven assets, directly boosting demand for gold allocation. Conversely, as risk sentiment in the market warms and uncertainty decreases, gold investment demand will undergo periodic contractions.
From the opportunity cost perspective, Europe and the US currently maintain a high interest rate environment, which increases the holding cost for gold as a non-interest-bearing asset. In contrast, interest rates are relatively low in Asian markets, so the opportunity cost for investors holding gold is lower, making gold investment and consumption willingness in Asian markets higher over the long term compared to Europe and the US.
From the perspective of demand structure, diversified demand for gold is the foundation for market stability. Consumer demand, investment demand, and central bank reserve demand together underpin gold prices. Among these, China and India are the world’s top two gold consumption markets. China’s annual gold demand is
900-1000 tons, while India’s annual demand is about 800 tons. These two markets dominate the global gold consumption landscape, serving as an indispensable core basis for forecasting global gold price trends.
In terms of central bank allocation trends, in the past fifteen years, global central banks have continuously been net buyers of gold. According to the World Gold Council’s “
2026 Global Central Bank Gold Reserves Survey”, 89% of surveyed central bank reserve managers expect that global central bank gold reserves will continue to increase in the next 12 months; 74% expect that the share of the US dollar in global reserves will decline in the next five years. The increasing demand for diversified reserve allocation by emerging market central banks will continue to benefit gold’s long-term market.
Regarding the impact of the US midterm elections, which the market is closely watching, Artigas analyzed that this year’s
US midterm elections, to be held in November, will not directly determine the movement of gold prices, but will profoundly influence the direction of global macroeconomic policies and market investor sentiment. The policy uncertainty brought about by the elections may drive up market safe haven demand, leading to increased short-term demand for gold allocation.
