Gold Market Drivers: May 2025 Review

Originally published 2025-05-18. Translation and editorial review: 14 October 2026. Market figures refer to the original reporting period.

1. Interest rates and inflation in the United States.

• US economic data shows inflation is starting to slow. The Producer Price Index (PPI) decreased by 0.5% in April. This results in the market predicting that Federal Reserve Bank (The Fed) may cut interest rates in the second half of 2025.

• Such prediction makes Gold prices rose as lower interest rates pushed gold. (which has no interest returns) is more attractive to investors.

2. The value of the United States dollar (USD)

• US Dollar Index (DXY) weakened 0.1% in the period. This makes gold traded in dollars cheaper for foreign investors. As a result, the demand for gold increases and prices rise.

3. Economic and geopolitical uncertainty

• Peace talks between Russia and Ukraine failed after President Vladimir Putin did not attend the Turkey meeting. This results in increased geopolitical uncertainty. and investors turn to holding gold as a safe asset.

4. Gold demand from ETFs and central banks

• Gold ETF has continued capital inflows in the first quarter of 2025, with investments up 170% year-over-year. This reflects the higher demand for gold from institutional investors.

• Central banks of many countries, including China and India. Still buying gold to increase reserves This results in increased demand for gold in the world market and supports gold prices in the long run. World Gold Council www.gold.org

5. Easing trade tensions

• Negotiations between the United States and China has made progress. The two countries agreed to reduce some trade tariffs and pause further tariff increases for 90 days, easing investor concerns. and funds are being moved from gold to other risky assets such as stocks. Reuters www.reuters.com

📊 Summary of the impact on gold prices

• Gold prices rose on expectations of a Fed rate cut and a weaker dollar.

• Geopolitical uncertainty and demand for gold from ETFs and central banks continue to support gold prices over the long term.

• However, the easing of trade tensions may reduce demand for gold as a safe-haven asset in the short term.