This would translate to a potential annual return of nearly 40% from current levels, driven by global economic uncertainty and rising safe-haven demand.

In its latest outlook, the WGC cautioned that worsening macroeconomic conditions—such as stagflation and mounting geopolitical tensions—could amplify investor appetite for gold, pushing prices significantly higher.

In a more moderate or "base case" outlook, gold is expected to stay range-bound for the remainder of 2025, ending the year 0–5% above current levels. Even in this scenario, the yellow metal would deliver an impressive 25–30% return for the year.

However, a bearish turn in the market could see prices fall by 12–17% in the second half, with WGC noting that $3,000 per ounce would likely act as a key support level. If breached, the council warned, disinvestment may gain momentum.

Investor Activity and ETF Inflows Surge

So far in 2025, gold has already delivered a 26% return in US dollar terms, with double-digit growth seen across most major currencies. The first half saw robust demand from over-the-counter (OTC) markets, central banks, and exchange-traded funds (ETFs), with daily average gold trading volumes reaching a record $329 billion.

ETFs, in particular, saw heavy inflows, pushing global assets under management (AUM) up by 41% to $383 billion by the end of June. Total holdings rose by 397 tonnes, hitting 3,616 tonnes — the highest since August 2022.

WGC analysts attribute the trend to a weaker dollar, steady interest rates, and a highly uncertain geopolitical climate, all of which have made gold a preferred hedge for investors seeking stability.

While gold continues to be supported by strong fundamentals, WGC noted that much of the upside may already be priced in. Sustained risk-on sentiment and rising equity markets could limit further gains, unless fresh shocks reignite demand.