HSBC revises its outlook for gold upwards: The bank now expects an average gold price of USD 3,355 per ounce for 2025 (previously USD 3,215) and USD 3,950 for 2026 (previously USD 3,125). The rationale cited is a persistently high safe-haven demand amidst geopolitical tensions, economic uncertainties, and a weaker US dollar. Concurrently, analysts point to continued active purchases by the official sector (central banks) as well as institutional investor demand for gold as a portfolio diversifier.
Gold Price at Record Highs
The upward trend is not merely a matter of forecast: Gold has already gained more than 60% year-to-date in 2025 and has already surpassed the USD 4,300 per ounce mark. During periods of political and economic uncertainty, the yellow metal is traditionally considered a safe haven – a role that has been impressively confirmed in recent months. In addition to geopolitical factors, the depreciation of the US dollar played a significant role, as a weaker Greenback facilitates access for buyers outside the dollar area.
Added to this are growing budget deficits in the USA and other major economies. According to HSBC, these structural funding gaps are driving the search for value-preserving assets. On the demand side, the central bank sector has recently proven to be a stabilizing factor. While HSBC expects official purchases to remain below the peak levels of 2022/23, they are likely to remain significantly above historical averages overall – an element that can support the price floor for gold.
HSBC’s Expectations for Gold
The increase in average gold forecasts is significant for two consecutive years. For 2025, HSBC now projects an annual average of USD 3,355/ounce, and for 2026, USD 3,950/ounce. This is attributed to a combination of geopolitical risk aversion, sustained central bank demand, and institutional investor interest in holding gold as a diversification component in portfolios.
At the same time, the bank’s focus remains on potential dampening factors. These include a gradual cooling of global inflation, which could dampen the inflation-driven portion of jewelry demand. The monetary policy outlook is also highlighted as crucial: Should the US Federal Reserve (Fed) deliver fewer interest rate cuts this year and in 2026 than currently priced in by the market, this could temporarily limit the upward momentum in gold. For the current month, futures markets see a very high probability of a 25 basis point rate cut, followed by another reduction in December – a sequence that could quickly trigger price reactions in case of deviations.
Beyond mere interest rate prospects, bankers also consider fiscal policy. The trend towards higher deficits, particularly in the USA, narrows the scope for restrictive monetary policy from the perspective of many investors, which indirectly provides tailwinds for the gold price. The interplay of fiscal stimulus, an uncertain growth path, and the geopolitical environment thus forms the framework for the upwardly adjusted price targets.
Macro Risks: Fed’s Trajectory and Geopolitical Tensions
Gold’s recent highs occurred during a period when political tensions between the USA and China once again came to the forefront. Beijing recently rejected US criticism of Chinese rare earth restrictions and reacted sharply to statements by US Treasury Secretary Scott Bessent. Such conflict lines are considered a catalyst in the market for safe-haven flows into gold, as they burden the predictability of global supply chains and trade relations.
On the interest rate front, the Fed remains the bottleneck. Gold reacts sensitively to real interest rates and dollar movements: Fewer or later interest rate cuts would tend to support the US dollar and increase the opportunity cost of holding non-yielding gold. Conversely, a faster easing path can underscore gold’s attractiveness as a store of value. Crucial here is not only the policy decision itself, but also the central bank’s communication regarding its medium-term inflation and growth assessment.
Outlook on Platinum and Palladium
In addition to gold, HSBC also commented on platinum group metals. The average forecasts for platinum and palladium in 2025 remain unchanged at USD 1,215/ounce and USD 1,100/ounce, respectively. The market dynamics of these two metals differ from gold, as demand is more strongly influenced by industrial and automotive industry cycles – particularly through their use in catalytic converters. While gold is primarily driven by macro themes such as real interest rates, currency developments, and geopolitical uncertainties, supply/demand aspects along the supply chains in South Africa, Russia, and North America play a larger role for platinum and palladium. The unchanged forecasts indicate that HSBC does not expect a comparable impetus here in the short term as it does for the gold price.
Conclusion: With the significant increase in price targets, gold once again moves into investors’ focus as a safe haven. Crucial for the further trajectory remain the Fed’s monetary policy, the development of budget deficits in major economies, and the geopolitical news situation. For market participants, this means: close attention to the next interest rate decision, the US dollar trend, and potential escalations or de-escalations in the international trade environment – factors that can significantly influence gold’s price development.
