With an increase of more than 60%, the price of Gold is on track for its strongest annual gain since 1979. At that time, geopolitical crises such as the Islamic revolution in Iran and the Soviet invasion of Afghanistan, as well as double-digit US inflation rates, caused the price of Gold to more than double within a year, reaching a record high in early 1980 that would remain unbroken until 2008. This year, Gold marked a series of record highs, the last of which was in October at $4,380 per troy ounce, Commerzbank's commodity analyst Carsten Fritsch notes.

Gold to rise to $4,400 over the course of the coming year

"Gold received considerable tailwind from strong demand for a safe haven due to numerous factors of uncertainty, such as the US president's tariff policy and his unprecedented attacks on the independence of the US Federal Reserve. These ranged from repeated insults against the current Fed chairman to attempts to dismiss a Fed governor. It is therefore not surprising that the US dollar's reputation as a safe haven suffered as a result, leading to stronger demand for Gold. This is evident from the strong inflows into Gold ETFs."

"There are a number of reasons to expect a higher Gold price next year. The most notable of these is the significant easing of monetary policy by the Fed that we expect to happen. US President Trump is likely to succeed in filling the Fed Board with a majority of people who share his vision of a significantly looser monetary policy over the course of the coming year. First and foremost, of course, is the appointment of a new Fed chair, as the term of the current chair, Jerome Powell, expires in May 2026, and he is also likely to then leave the board. Trump's economic advisor, Kevin Hassett, is considered the favorite to succeed Powell."

"Another reason is the ongoing Gold purchases by central banks. They are likely to be significantly higher than before 2022. This is because many central banks still want to diversify their currency reserves. Another consideration is certainly the fact that Russian foreign exchange reserves held in Western currencies have been frozen since the start of the war in Ukraine, and the EU is still considering making them available to Ukraine. Nevertheless, the high price level is leaving its mark on physical demand, especially for Gold jewelry. However, this is likely to be offset by continued robust investment demand. We therefore expect the price of Gold to rise to $4,400 per troy ounce over the course of the coming year."