Gold Too High? Central Banks Don’t Think So. Here's Why They’re Still Buying.

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April 4, 2025

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In this week’s The Gold Spot, Scottsdale Bullion & Coin Founder Eric Sepanek and Sr. Precious Metals Advisor Steve Rand discuss gold’s extended rally, what’s pushing prices to new highs, why $4,000 an ounce gold is on the table, and whether it’s too late for investors to join the rally.

Gold’s Rally Hits Another High

The gold rally is flexing its strength with another all-time high. Less than a month after crossing the $3,000 an ounce hurdle, gold prices have already increased by over a hundred dollars. Some people anticipated slight resistance at this psychological barrier, but the yellow metal blew past with ease. In the first quarter of 2025, gold boasts a 19% return. Those gains nearly doubled when measuring year-over-year, with yields at around 38%.

Why Are Gold Prices Soaring?

Central Bank Buying

National demand has been the backbone of gold’s years-long rally. Since 2022, central banks have been gobbling up more than 1,000 tons of gold bullion annually, doubling previous years’ demand averages. De-dollarization attempts amid USD weaponization and weakness have primarily fueled this strong appetite.

Central banks really move the gold market; it’s not the mom-and-pop investors.
–SBC Founder Eric Sepanek

central bank gold purchases vs gold prices chart

Government Waste

The Department of Government Efficiency (DOGE) has pulled back the curtain on federal spending, giving taxpayers a rare look into how their dollars are used. Their findings confirm many investors’ worst fears about government waste, which contributed to federal deficits and the US national debt. This frivolous and irresponsible spending has increased safe-haven demand.

Dollar Fears

The US dollar is the primary victim of these economic challenges. Central bank gold buying dries up USD demand, wasteful government spending worsens inflation, and a full-blown trade war harms dollar confidence abroad. Recently, Deutsche Bank went so far as to suggest the dollar could lose its safe-haven status. Throughout the greenback’s struggles, gold has arisen as the heir apparent for both central banks and retail investors looking for price stability, inherent value, and protection from inflation.

Central banks are terrified of the US dollar and what it means and what’s going to happen with it down the road. They’re hedging themselves just like we should be doing. That’s what this comes down to: what the dollar buys you now, compared to what it bought you in the past, and what little it may buy you in the future.
–Sr. Precious Metals Advisor Steve Rand

Financial Firms Up Gold Price Targets

bank gold price forecasts 2025

The bleak economic prospects and bullish gold momentum have forced usually skeptical banks to issue higher 2025 gold price predictions. Here are some of the most notable:

Morgan Stanley: $3,400/oz
Bank of America: $3,500/oz
Macquarie Group: $3,500/oz
Citigroup: $3,500/oz
DoubleLine Capital: $4,000/oz
Yardeni Research: $4,000/oz
Société Générale (SocGen): $4,000/oz
BMG Group: $4,000/oz
Goldman Sachs: $4,200/oz¹

A growing number of banks and experts are calling for $4,000 gold by the end of 2025 or sometime next year. This may seem like an unrealistic jump at this point, but the yellow metal has soared much higher in much tighter time frames.

👉 Suggested Reading: $4,000 Gold?! These Experts Say It’s Within Reach

Is it too late to join the rally?

No! It’s not too late, and gold prices aren’t too high for investors to enter the market or top up their holdings. All signs point to higher prices: sustained central bank demand, deteriorating macro conditions, bullish gold price forecasts, and, perhaps most importantly, the devaluation of the dollar.

“You’ve got to stop looking at this as the price, and look at it for what it really means: The dollar is not valued worldwide. That’s why so much buying of gold is happening at these levels and continues to happen regardless of where the price is.”
Steve Rand
General Manager / Sr. Precious Metals Advisor

Get in touch with a precious metals advisor to set up your portfolio for success. The team at Scottsdale Bullion & Coin is ready to help! Contact us today by calling toll-free at 1-888-812-9892 or using our live chat function.

IRA Contribution Deadline Is Around the Corner!

2024 IRA Contribution

Countdown

The deadline to make your IRA contributions for 2024 is fast approaching! Between now and April 15, 2025 (Tax Day), you can fund your retirement plan and take advantage of the tax benefits. Don’t miss your chance to lower your taxable income for the 2024 tax year and lock in gold prices before it moves a lot higher. Check out our step-by-step guide to make the process smooth, timely, and successful.

Question or Comments?

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