LBMA Precious Metals Market Report: Q1 2025

Gold began 2025 at $2,644.60, some $139.35 below its all-time high achieved on 30 October 2024, a year in which the price had gained over 25%, reflecting a range of investor concerns including the Middle East and Ukraine wars, inflation, and specifically in the last quarter, fear that the US presidential election would be too close, prompting factional violence.

One indication of investor thinking, at least at a retail level, came from the Royal Mint which reported that 2024 was a record year for silver and gold coin and bar sales with revenues up 153% by comparison to 2023.

In the event, as everyone knows, Donald Trump won the election comfortably, equities gained, the dollar strengthened, and the gold price fell back. In short, there was a brief spell, which carried over into the first weeks of the year, until the formal presidential inauguration on 20 January, during which major markets trended upwards. The S&P 500 Index gained 3.1%, gold rose 2.4%, the dollar/euro rate was steady, as was the yield from 10-year US Treasuries.

This period of relative stability/positivity was short-lived as the precious metals market began to take the threat of trade tariffs seriously, and there was a rush to build physical gold and silver inventories in New York. Concomitantly, the LBMA London gold price, which had broken through $2,700 for the first time in the year on 16 January, began a more or less unbroken ascent through to the end of the quarter, ending with a three-month gain of 17.8% and hitting an all-time high at the 31 March a.m. auction ($3,120.20).

By 29 January, according to some news reports, New York gold was briefly trading some $60 above London, and according to Financial Times, “since the U.S. election, 393 metric tonnes of gold have been moved into Comex vaults, increasing inventories there by nearly 75% to their highest level since August 2022. Additional shipments are believed to have gone to private vaults owned by HSBC and JPMorgan.”

These moves, coupled, apparently, with pressure on physical metal deliveries, tighter lease rates and higher borrowing costs, led to rumours questioning whether gold supplies in London were becoming too low to support trading. However, although the January and February vault numbers – when published – did show a decline in the weight of gold held in London, this decline was, at 2.41% (end-December 8,686 tonnes to end-February 8,476 tonnes) within normal bounds, and negative comment largely eroded.

London was not the only market impacted by US-led volatility. Australia, for example, reported shipping a record amount of gold ($2.9bn) to the US in January.

In the end, uncertainties about new US trade policy, the possibility of a trade war, continuing geopolitical issues, notably the breakdown of the Israel/Hammas ceasefire on 13 March after only a few days, plus the American president’s unexpected notions regarding Greenland and Canada, all contributed to continuing investment in safe-haven gold, even as the ‘tariff trade’ became ‘exhausted’ as Bloomberg reported on 5 March.

The end, or apparent end of the tariff trade led to a small reversal in the volume of gold held in London’s vaults with a rise through March of 0.14% to end the quarter at 272,907,000 oz (8,488 tonnes).

While it is true that some Asian jewellery markets slowed as the metal’s price rose ever higher, at an institutional level, many central banks were active buyers. The World Gold Council reported that central bank net purchases in February were 24 tonnes, led by Poland, the People’s Bank of China (fourth consecutive month), Turkey and the Czech Republic. Through the first two months of the year, only Russia, the Kyrgyz Republic, Kazakhstan and Uzbekistan were reported as net sellers.

The strong upward momentum exhibited by the gold price in February and March appeared to catch a number of analysts and commentators off guard. The LBMA survey of professional analysts’ forecasts, published at the end of January, proposed an average gold price of $2,736.69 for the year, some 14.7% higher than the 2024 average.

Meanwhile, various forecasters, Goldman Sachs for example, continued to change their end-year predictions as the price moved higher, shifting from $3,000 to $3,300, while Macquarie Bank suggested a price of $3,500 might be achieved in Q3. Analysts from India, quoted by the Hindu Business Line in January were (at that time, at least) rather more conservative suggesting a gold price rise of 8% during the year and a 10%-15% gain for silver.