1. Gold will update historic highs
Gold will update historic highs at $2800-2900 per oz. in 2025. Such expectations are based on strong demand from central banks, as well as existing economic and inflationary risks in the world.
At the end of 2024, the all-in sustaining cost of gold (AISC) was $1,647 per ounce, which is significantly lower than the current price. Nevertheless, the AISC increased by 11% over the year.
The resumption of gold price growth will fuel investment interest in other metals such as silver, platinum, palladium and copper.
2. EUR won’t be cheaper than USD
The euro will approach parity (1:1) against the US dollar at the beginning of the year, followed by a recovery in the value of the European currency. Donald Trump will oppose a strong dollar, as he did in 2017, during his first term as US president.
Moreover, the US Federal Reserve will continue to ease monetary policy and cut its discount rate from 4.5% to 3.5%.
Thus, the value of the USD will decrease, which will weaken its position against other hard currencies.
3. Renewables are back in investors’ focus
The need for alternative energy sources is growing every year. The shortage of electricity became especially noticeable with the development of AI.
The Renewables sector has been an outsider in the stock market in recent years. Nevertheless, analysts see tremendous prospects for the sector in 2025.
An additional driver of growth in energy stocks is the rather high oil and gas prices in early 2025.
4. The Japanese yen is among the strongest currencies
Once again, we are talking about the foreign exchange market, but such opportunities do not arise every year. The Japanese yen could rise from 0.6x to the US dollar to 0.8x within a year (+30%).
The Bank of Japan has begun a cycle of key policy rate hikes, with other key central banks pursuing loose policies in parallel. If the BOJ’s actions are decisive, the cost of borrowing in yen will rise.
In turn, this will lead to the closure of yen-denominated credit lines by hedge funds that have been taking out financing at low yen rates for many years.
5. China intensifies preparations for war
Recent analysts’ forecasts indicate that China will not be able to grow by 5% or more in the next 5 years at least. This level is less than the targets set by the Communist Party of China.
Stimulating the economy and providing financial support to banks and large businesses will not lead to an acceleration of GDP, although it may have a positive impact on the Chinese stock market.
Given the weakness of the economy, China will raise rates around Taiwan. And the Trump administration’s policy on the war in Ukraine will be extremely important.
We would also like to remind you that we are holding a charity sale of paintings by children. All proceeds will be redirected to Children of Heroes. Please join in!
