Introduction: A Stunning Forecast
Gold prices are nearing all-time highs in 2025, trading at $2,946 per ounce. Macquarie Bank’s forecast that gold could skyrocket to $3,500 by Q3 would require a 19% surge from current levels, a rally that would outpace most asset classes this year.
Is this ambitious target achievable, or just wishful thinking? Let’s dissect Macquarie’s rationale and the powerful forces driving gold’s ascent.
Macquarie’s $3,500 Forecast: Why It’s Making Headlines
In a March 2025 research note, Macquarie analysts outlined three pillars supporting their bullish outlook:
- Synchronized Central Bank Buying: Global central banks, led by China and Iran, are stockpiling gold at a record pace to diversify away from the U.S. dollar.
- Retail Investor FOMO: Fear of missing out (FOMO) is driving households—particularly in Asia— to pour savings into gold ETFs and physical bars.
- Macroeconomic Shifts: Slowing growth, sticky inflation, and a dovish Fed are creating a “perfect storm” for safe-haven assets.
The 4 Drivers Fueling Gold’s Meteoric Rise
1. The Fed’s Dovish Pivot: Lower Rates, Higher Gold
The Federal Reserve’s signal that rate cuts are imminent has turbocharged gold’s appeal. Lower rates reduce the opportunity cost of holding non-yielding gold, while a weaker dollar makes bullion cheaper for foreign buyers.
2. Geopolitical Firestorms: From Trade Wars to Iran’s Gambit
- U.S.-China Tensions: Escalating tariffs on Chinese EVs and semiconductors have reignited fears of a full-blown trade war, pushing investors toward gold’s stability.
- Iran’s Golden Shield: Under renewed Trump-era sanctions, Iran has quietly amassed $2 billion in gold reserves since late 2024, circumventing dollar-based financial systems.
3. China’s Gold Frenzy: A Nation Hedging Against Uncertainty
China’s gold demand jumped 22% year-on-year in February 2025, fueled by a wobbly yuan and a property market slump. Retail investors are swapping empty apartments for gold jewelry and bars, while the PBOC continues its 18-month gold-buying spree.
4. Central Banks’ “De-Dollarization” Playbook
Global central banks bought 1,100 tonnes of gold in 2024—the second-highest annual total on record. Emerging markets like Turkey and India are following China and Iran in prioritizing bullion as a reserve asset.
Challenges to the $3,500 Target
- Fed Hawkish Surprise: If inflation rebounds, the Fed could delay rate cuts, denting gold’s momentum.
- U.S.-China Detente: A trade deal could temporarily ease safe-haven demand.
- Profit-Taking: Traders may cash in gains at psychological resistance levels like $3,000.
What Investors Should Watch in 2025
- 📅 Fed Policy Meetings: Rate decisions in June, September, and December will shape gold’s trajectory.
- 📉 U.S.-China Trade Talks: Any breakdown could trigger a gold price spike.
- 🏦 Central Bank Gold Reserves Data: Sustained purchases would signal long-term demand.
Conclusion: A Golden Crossroads
Macquarie’s $3,500 per ounce forecast hinges on gold’s unique role as a hedge against chaos. At $2,946 per ounce, the metal is already testing record territory—but with central banks accelerating purchases, retail investors piling in, and the Fed poised to cut rates, the runway for further gains remains open.
While skeptics argue the target is optimistic, gold’s trajectory will ultimately reflect the depth of global uncertainties. As 2025 unfolds, keep your eyes on the Fed, the headlines, and the $3,000 threshold.
The next leg of this rally could redefine gold’s place in modern finance.
Sources: World Gold Council, Macquarie Research, Mining Weekly, Investing.com, Al Jazeera, FXStreet.
