As the threshold of a new year approaches, the path for gold to reach historic highs in 2025 seems to be riddled with uncertainties and challenges.

In the coming year, the trading price of gold is expected to fluctuate within a relatively wide range, typically between $2,500 and $3,200 per ounceMarket analysts agree that the fate of the precious metals market will largely depend on the direction of the Federal Reserve's monetary policiesMKS PAMP, a prominent precious metals firm, has even predicted that gold's average trading price for the year could reach $2,750 per ounce, marking a significant 14% increase over the average price for the current year.

When discussing the specifics of gold price movements, the ability of gold to break the $3,000 barrier or maintain a price around $2,500 will largely hinge on whether the Federal Reserve's actions in managing inflation will be proactive or lag behind the curve

There is a general consensus that the Federal Reserve may fall behind the inflation curve, which could lead to a decline in real interest rates and a devaluation of the dollarFrom a broader structural perspective, long-term high inflation, the intensifying trend of de-globalization, persistent currency depreciation, central banks' ongoing de-dollarization efforts, unpredictable geopolitical tensions, unsustainable global debt growth paths, and a positive feedback loop formed by the lack of gold holdings among ordinary investors all combine to reinforce gold's role as an essential safe-haven asset within diversified portfolios.

However, despite the strong fundamental support for gold in 2025, there are cautionary notes that investors should keep in mindThe likelihood of a bear market in gold next year is seen as higher than the chance of a bull marketOne of the key risks highlighted is the potential for U.S

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policy to push gold prices closer to the $2,500 per ounce mark, with a probability of this outcome standing at around 30%. This could be driven by the U.Sgovernment's push for economic growth through measures like tax cuts and regulatory relaxation, which could make the dollar more attractive, thereby dampening demand for gold.

At the same time, the "America First" policies promoted by the current government could push consumer prices higher, forcing the Federal Reserve to slow down its easing cycle, even though it is already behind the inflation curveAdditionally, the new government's focus on other currencies might raise concerns among some investors regarding the precious metals market, pushing them to stay away from gold in the coming year.

Turning to the potential bullish factors for gold, there is the ongoing trend of diversification into emerging markets, central banks' continued buying of gold, and the global move away from the dollar

However, these trends come with potential downside risks, such as increasing government debt, rising inflationary pressures, and the possibility of overwhelming the Federal ReserveIn such a scenario, the dollar could weaken further, providing a boost to gold prices.

While there remains a cautious view on the gold market, a more optimistic outlook has emerged for silverPredictions suggest that silver will trade within the range of $28 to $42 per ounce, with an average price of $36.50 per ounce, reflecting a 23% increase from the current year's average priceAnalysts like Shiels point to global monetary easing as a factor that will stimulate the economy and, in turn, boost industrial demand for silver in 2025.

Given the synchronised rate cuts by central banks, the supportive macroeconomic backdrop in major Asian economies and the U.S., continued strong demand for solar energy, and the eventual weakening of the dollar, silver is expected to outperform other precious metals in 2025. While solar capacity in major Asian economies is nearing its growth plateau, other parts of the world are catching up, increasingly adopting next-generation technologies with higher silver content, such as TOPCon and PERC.

Though industrial demand will be the key pillar supporting the silver market, Shiels also noted that for silver to hit its expected high point, it will need to attract new investment demand

The price rise potential for silver will depend on investor participation rather than the potential contraction of global industrial demand due to tariff threatsShiels anticipates that investment demand from both institutional and retail investors will exceed the relatively modest inflows seen in 2024.

There is a 15% probability that silver prices could fall back to $22 per ounce, with the greatest risk being a potential global economic recession that could weaken industrial demandHowever, Shiels remains confident that silver's role in the evolving global economic and energy landscape will provide the necessary support for the metal's upward trajectory in the coming year.

As investors look to 2025, the precious metals market is poised to face both significant challenges and opportunitiesWhile gold is expected to maintain its position as a cornerstone safe-haven asset, its journey will depend heavily on macroeconomic factors such as U.S