Gold is likely to remain 'range-bound' in the second half of this year, 0-5 per cent higher than current levels, considering the current market consensus, revealed a report by the World Gold Council (WGC).
Current market consensus suggests that the global GDP will move sideways and remain below trend in the second half. Additionally, it also sees world inflation rising to over 5 per cent, weighed down by the global impact of tariffs.
A 0-5 per cent rise in the gold prices from the current level could lead to gold prices marking a 25-30 per cent yearly rise.
"In response to this mixed economic backdrop, central banks are expected to begin cautiously lowering interest rates towards the end of Q4, with the Fed expected to cut rates by 50bps by the end of the year," WGC said.
A rate cut by the Federal Reserve and continued uncertainty would maintain investor appetite, and could further lead to an upward movement in gold prices.
Furthermore, WGC believes that the current trend of gold consolidation in the past few months could lead to a healthy pause in a broader uptrend, which would help to ease previous overbought conditions.
However, the report cautions that, rise in gold prices could lead to a curb in consumer demand, which could dampen stronger gold performance.
In the background, gold has risen about 26 per cent in the first half of 2025, boosted by a combination of factors including a weaker US dollar, range bound interest rates, and a highly uncertain geo-political and geo-economic environment.
"While some of these drivers are expected to persist, the path forward remains highly dependent on multiple factors, including trade tensions, inflation dynamics, and monetary policy" noted the report.
In 2025, gold has outperformed all major assets such as US cash, US bonds, US stocks and many others.
However, WGC stated that gold remains well-positioned to support tactical and strategic investment decisions in the current macro landscape.
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