HSBC has raised its 2025 average gold price forecast to $3,355 per ounce from $3,215 due to safe-haven demand driven by geopolitical tensions, economic uncertainty, and a weakening U.S. dollar.

"Sentiment remains bullish as rallies are expected to continue in 2026 aided by official sector buying and institutional demand for gold as a diversifier," the bank said in a note dated October 15.

Mounting fiscal deficits in the U.S. and other major economies are driving increased demand for gold, HSBC said.

Gold, traditionally seen as a store of value during times of economic and geopolitical instability, has risen over 60% so far in 2025, and hit a record high of $4,250.89 on Thursday.
China on Thursday accused the U.S. of stoking panic over Beijing's rare earth controls and said Treasury Secretary Scott Bessent had made "grossly distorted" remarks about a top Chinese trade negotiator, rejecting a U.S. call to roll back the curbs.

"Central bank demand is likely to remain high, buoyed by geopolitical risks and dollar diversification, but below peak 2022-23 levels," HSBC said.

However, if the U.S. Federal Reserve delivers fewer rate cuts than currently projected for this year and next, it could temper the rally, HSBC said.

Investors are pricing in a near-certain 25-basis-point rate cut at this month's Fed meeting, with expectations of another cut in December.
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Further, gradual declines in global inflation may dampen jewellery purchases driven by inflationary concerns, HSBC said.

Meanwhile, the bank kept its 2025 average price forecasts for platinum and palladium at $1,215 per ounce and $1,100 per ounce, respectively.

Courtesy : Reuters