Gold emerged as the top-performing major asset class in the first half of 2025, posting a remarkable 26% gain in US dollar terms, according to the World Gold Council’s (WGC) Gold Mid-Year Outlook 2025. The surge was supported by a weaker US dollar, stable interest rates, and rising geopolitical tensions, which fuelled strong investment demand through ETFs, over-the-counter (OTC) markets, and global exchanges. Central banks also continued to add gold to their reserves, further boosting momentum.

Looking ahead, WGC’s Gold Valuation Framework outlines three potential scenarios for the remainder of the year:

• Base Case: Gold remains largely range-bound with a slight upside of 0–5%, supported by cautious rate cuts and lingering macroeconomic uncertainty.
• Bull Case: A deteriorating economic environment—such as stagflation or recession risks—could drive gold up another 10–15% as investors increase allocations to safe-haven assets.
• Bear Case: If geopolitical tensions ease and global economic growth strengthens, gold prices could decline 12–17%, pressured by rising yields, a stronger US dollar, and reduced investor hedging.

The first half of 2025 also saw gold set 26 new all-time highs, with daily trading volumes hitting a record $329 billion. Global gold ETF holdings rose sharply by 41%, reaching $383 billion. However, WGC cautioned that higher gold prices may be starting to weigh on consumer demand and could lead to increased gold recycling.

The Council noted that while gold’s underlying fundamentals remain strong, its trajectory in the second half will depend on the complex interplay of global trade shifts, inflation developments, and central bank policy actions.