Gold prices are anticipated to surge to US$3250 per ounce by the end of 2025, driven by factors such as central banks stockpiling gold as a safeguard against geopolitical uncertainties. VanEck’s gold and precious metals portfolio manager, Imaru Casanova, predicts this upward trajectory, emphasizing the metal’s role as a traditional hedge against inflation and a symbol of uncertainty.

The recent 43% surge in gold prices over the past year, reaching US$2915 per ounce, reflects the growing investor interest in gold as a safe haven asset. Casanova highlights the significance of gold as a valuable investment option during economic turmoil, citing its ability to provide stability and diversification benefits to investment portfolios.

In light of the ongoing global economic uncertainties, including trade policy concerns and escalating debt levels, investors are turning to gold as a reliable store of value. Casanova notes that central banks worldwide have significantly increased their gold purchases since 2022, with countries like China, Turkey, Poland, and India leading the way. This surge in central bank buying activity has bolstered the demand for gold and supported its price rally.

Despite the impressive performance of gold, mining companies have faced challenges such as rising operational costs, impacting their share prices. However, Casanova believes that this presents an opportunity for investors, as gold mining ETFs, which hold a diversified portfolio of mining companies, are currently undervalued. These ETFs offer income potential through dividends, unlike physical gold investments.

Casanova points out that the rise in gold prices has outpaced the increase in mining costs, leading to improved profit margins for gold miners. The average all-in sustaining costs for producing an ounce of gold have risen, but the surge in gold prices has more than compensated for this cost escalation. As a result, gold stocks are considered undervalued compared to the metal itself, indicating a positive outlook for gold equities in the future.

The VanEck Gold Miners ETF, comprising a range of prominent gold mining companies like Newmont, Agnico Eagle, Evolution Mining, and Zijin Mining, has demonstrated strong performance, returning nearly 60% over the past year. This ETF provides investors with exposure to the gold mining sector, offering potential benefits during periods of market volatility and inflation concerns.

In conclusion, the forecasted surge in gold prices to US$3250 by the end of 2025 reflects the growing demand for gold as a safe haven asset amid economic uncertainties. With central banks increasing their gold reserves and gold mining stocks showing potential for growth, investors have the opportunity to capitalize on the positive outlook for the gold market in the coming years.