Eric Sepanek
SBC Founder
Eric Sepanek is the founder of Scottsdale Bullion & Coin, established in 2011. With extensive experience in the precious metals industry, he is dedicated to educating Americans on the wealth preservation power of gold and silver.
Gold’s rally has carried strong momentum into 2025, setting new all-time highs in January and February. Instead of pulling back at these record levels, traders are doubling down, placing aggressive bets on even higher prices. Some are targeting $4,000 by mid-year, reflecting the market’s strong bullish sentiment. If gold reaches that level, it would mark a 33% gain—a figure that doesn’t seem far-fetched given its 27% surge in 2024.
Gold’s Rockstar Performance
Precious metals kicked off 2025 with the strongest January in years, rising approximately 9% as an asset class. Gold prices increased more than 6% in the first month and have further capitalized on those gains, reaching a year-high above $2,900. This recent upswing has elevated gold’s year-to-date return above 10%, making it one of the highest-performing commodities.
Traders Make Bullish Bets
The pace of gold’s price action looks bullish, but the real test of market sentiment is where investors expect the yellow metal will go. Options traders, who literally put their money where their mouth is, place bets on future price movements. Lately, activity signals a positive outlook for gold far into the year.
Recently, analysts noticed several large-scale options trades with significant stakes. A considerable block of 2,500 options contracts was made for September, betting that gold prices would reach $3,000, $3,200, and $3,400 by the end of Q3. In total, this position represents a $7.25 million investment, suggesting that the traders are confident that gold’s rally will continue.
More notably, another batch of options spreads set for May at $4,000 and $5,000 to the tune of 4,750 contracts. A similar trade was executed for July with 4,000 contracts. This setup reveals even higher expectations for gold to run 33% within a few months to clear at least $4,000 by mid-2025.
Rate Cut Catalyst?
The biggest wildcard for gold prices remains the Federal Reserve’s interest rate strategy. After a sharp 50 basis point cut in 2024, persistent inflation forced the Fed to slow its pace of planned reductions. The weaker-than-expected January jobs report added further hesitation, as the economy added 143,000 jobs—below forecasts but consistent with historical averages for the month.
While the Fed’s December Summary of Economic Projections (SEP) initially signaled two rate cuts in 2025, investor expectations have shifted. According to the CME FedWatch tool, markets now see a 52% chance that only one rate cut will take place this year. Generally, rate cuts act as tailwinds for gold as the opportunity cost of owning non-yielding assets wanes. Even if the Fed moves at a slower pace, the trend of quantitative easing is viewed as gold-positive.
How high can gold go in 2025?
With gold rising consistently and economic uncertainty taking hold, many investors are wondering how much higher prices can go. Options traders aren’t alone in their optimistic outlook, with experts across the board revealing impressive gold price forecasts for 2025.
While the average prediction is $3,000, some people are already upping the target as gold prices near that milestone.
$3,000 is just a round number…a mental thing for traders. I think you should be able to see $3,300 pretty quickly.– Damian White, Sr. Precious Metals Advisor at Scottsdale Bullion & Coin