Gold is glittering to kick off 2025.
The most active futures on gold are currently trading at $2745.10, up $27.30 or 1% from a day earlier. That level is just about 2% shy of its all-time settlement high of $2800.80 marked on Oct. 30. If the contract closes at current levels, it would be the highest close since last month, according to the Dow Jones Market Data.
Gold has been on a tear lately. Investors in gold-related exchange-traded funds like the VanEck Gold Miners ETF and SPDR Gold Shares are sitting on gains of 25% and 31%, respectively, over the past year. It matches the returns passive equity investors have gotten over the past year, with the SPDR S&P 500 ETF up 26%.
The move higher comes in part due to bullish signals from central banks. The People’s Bank of China started buying gold again late last year after holding off for most of 2024. Poland’s central bank has around 15% of reserve assets in gold, with a goal to increase it to 20%.
But today’s bump comes due to gold’s position as a safe haven and an inflation hedge. Consumer prices gained 2.9% year over year in December versus the 2.7% recorded in November, according to Wednesday’s data.
“Gold remains the consummate hedge for investors worried about inflation or growth,” wrote Jared Woodard and the team from BofA securities on Tuesday. Gold was labeled as BofA’s “highest conviction investment ideas for 2025.”
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