HSBC says gold prices head for biggest rise since 1979

Gold prices are approaching their strongest annual rise since 1979, according to an HSBC research report. Rodolphe Bohn, Currency and Commodities Strategist at HSBC Private Bank and Premier Wealth, said global gold prices have risen by around 54% since the start of the year, driven by inflation concerns and a weakening US dollar.

HSBC noted that gold briefly broke a record high of USD 4,380 per troy ounce in October before easing to around USD 3,885 on the back of profit-taking.

After consolidating around USD 4,000, Bohn said gold has resumed strengthening, supported by market speculation over a potential Federal Reserve interest-rate cut in December.

“We maintain a positive outlook for gold,” Bohn said, emphasising its continued relevance as a hedging instrument. At the same time, Bohn noted that central banks around the world are continuing to increase their gold reserves. The share of gold in central-bank foreign reserves rose to about 22% in the second quarter of 2025, from 13% in 2022.

“Consistent central-bank buying has provided support whenever gold prices correct amid market volatility,” Bohn explained. Beyond central banks, retail demand through gold-based Exchange Traded Funds (ETFs) also supported gold prices in mid-2024. “Accumulation by central banks has in turn lifted retail investor appetite for gold,” he added.

Given these trends, HSBC sees further room for gold to strengthen in the coming months.

“Overall, with expectations of a weaker US dollar and global monetary easing led by the Fed, there remains upside potential for gold prices, albeit at a slower pace than before,” Bohn said. According to IDNFinancials.com data, gold opened 0.54% higher at USD 4,152 per troy ounce during early Asian trading as of 9:10 AM WIB.

However, gold prices remain 5.2% below the record level reached in October.

Source: https://www.idnfinancials.com/