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 [Music] I'm Charlotte McLoud with investing news.com and here today with me is Juan Carlos artiguez local head of research at the world go Council thank you so much for being here great to have you thank you so much for having me today really good to be speaking with you and we've got a lot to get into today because the world gold Council just released its 2025 Outlook report I thought before we start looking ahead to next year we can do a brief look back at 2024 it was a pretty interesting year so

I'm curious to know if there were any surprises for you things that stood out for you that you would really take away from this past year for investors well absolutely I think that one of the key things that has caught investors attention is how strong has gold performance has been this year so gold is all nearly 30% year date and it actually outperformed many asset classes throughout the year and and the interesting thing is that it did so in spite of the fact that interest rates remain relatively High still and

especially towards the end of the year the dollar is strengthened right so when you look at Gold's performance in this context often times it um elicits questions from investors that tend to focus primarily on those two things interest rates and the dollar to understand gold performance and gold performance really go goes goes beyond that and and I would be happy to talk to you more about that yeah I think just before we turn the camera on you're speaking about Gold's dual nature and

how important it is for investors to be aware of all the components behind gold so maybe we go into that a little bit before we move on and look more deeply at 2025 that's correct so gold demand has three primarily three three p primary components the first one is consumer demand and that is primarily through jewelry and Technology then there's investment demand that is typically typically linked to either individual indiv investors or institutions and then finally Central Bank demand so when we talk about the

gold stol nature we talk about the fact that uh consumer demand is going to respond primarily to drivers such as economic growth or for example also respond to uh to to the price of gold as any consumer good or or normal and and and luxury good responds to on the flip side investment demand responds to more you know Financial driven variables such as interest rates or risk and it tends to actually um fit positively from Price trajectory and this dual nature makes gold very interesting very robust and it

also explains how it performs both in in periods of good economic growth but also how it it tends to perform quite well in periods of risk Trump's presidency is definitely going to be an important factor for investors to watch in 2025 there's already questions about whether he's going to be good for business and the economy or if his policies are going to be inflationary what is the World goal Council going to be watching most closely when it comes to Trump and gold I think that is what is interesting for

the gold market in general is that it's a global market so while there is definitely an important component that comes from the US economy and whichever economic fiscal and monetary policies the Trump Administration may bring they will still play in the context of a global market and for gold you know different investors of different regions May respond as well not only to the global Dynamics but to their local environments now I think that the key component here the the key thing to to keep an eye on is that um this the

second term from for president Trump will likely bring uncertainty for investors especially globally in terms of the actual policies they will Implement and what their effect will be not only their in their intended effect but also the actual effect that it that that they may bring because sometimes policies are intended to have one effect and they may you know investors and consumers May react differently and that level of uncertainty I think that is you know keeping investors very much at tune at

uh what may happen we do think that at the beginning um very likely uh investors will continue with their risk on appetite we've seen flows into the equity market and especially in um you know for many US companies that has been positive and and there's um you know good positive sentiment towards that now again the question will be once various policies start to get implemented how will they translate to the real economy and whether that may bring um you know inflation or whether any uh tariffs that

may actually be implemented uh could disrupt trade and all of these are unknowns we don't know exactly what uh what will happen but we do think that gold remains top of mind for many investors as means to Hench overall risk in the global economy definitely I I think that makes a lot of sense and one question that I've been asking a lot of people as we prepare for a trump second term is whether we can look back at his first term as a blueprint for what could happen in terms of what he does and how

that impacts gold and it sounds like a lot of the answers I've been getting are not not really but what are your thoughts on on that question yeah I think that again there's a lot of uncertainty exactly on how things will play out uh um the there are a lot of learnings from the Trump Administration into their their first term or his first term and how that um translates into policy but uh there's also a very different landscape at present that when he first took CES back in 2016 right what I can tell you though is

that gold did perform well uh under the Trump Administration U pre and postco so it was not only the the the co effect that was Global and and you know completely independent to a degree of of many of the policies that had happened before but just generally I think that there was a good performance for gold even in in the first couple of years of his presidency hardly as I mentioned earlier because gold is truly a global asset so it's not just what happens in the US that matters in fact actually for

example for Canadian investors often times their reaction and their decisions are going to be um made based on you know how they feel local inflation may play out or the strength of of the Canadian dollar and the state of the economy right so and gold as a global market is really the sum of the decisions of Global Investors and consumers okay okay thank you for going into that I do find it pretty interesting so let's go beyond the us and take a look over at China so China played a major role in driving the gold

price in the first half of 2024 this is something something that the world gold council's report takes a look at so how is Chinese demand for gold shaping up as we look forward to 2025 particularly as the country is facing some challenges internally with its economy and as we have these tariff threats coming from the US right so look from uh the Chinese market in particular from an individual perspective um demand is more or less 60% jewelry and about 40% investment prod speaking right and these two parts

of the market are going to behave somewhat differently the the jewelry side in particular is going to respond to economic growth and to prices specifically as economic growth increases or if economic growth is stronger then there's more support for jewelry demand um and if it's weaker it tends to create headwinds now price is the opposite that as price increases that tends to um you know create we headwinds for for gold demand and vice versa right so what is happening as we look forward well on the one hand

there's a question of about economic growth and how strong or not it will be next year and that's something that we're monitoring very very closely because it can have an effect of course in um you know the strength of Chinese demand I think that one of the positive aspects though is that the gold price has started to stabilize a little bit more after increasing very consistently for most most of the year and when you have a little bit more of a stable gold price that can be a bit more supportive

of consumer demand but it will really depend on um you know the effect for example of some of the stimulus that the Chinese government has implemented or may Implement depending on um you know how global trade shapes up now on the investment side we have seen fairly consistent interest from investors of using gold to hedge risk and that risk is not necessarily going away anytime soon so that may actually um create a little bit of a counterbalance and soften any potential weakness we may see on the consumer side even though as I

mentioned earlier generally speaking the jewelry side of theand is is slightly larger than the investment side okay and and keeping on that Global outlook for gold in 2025 what other regions are you going to be watching most carefully when it comes to demand next year Well Western investors uh were definitely also keeping an eye on and monitoring because interestingly enough even though the gold price this year broke record highs about 40 times H you know year to date and and as we were discussing earlier it has performed

quite well ER in previous occasions when the gold price has increased so strongly it has usually been accompanied by Western investment flows in particular through goldback dtfs which we haven't seen as much this year we have seen some where we saw some in the third quarter but they were not necessarily as widespread as in previous occasions right and and and which basically means that the the market the Western Market the Western investment Market is not saturated right so if there's a trigger

like significantly lower interest rates or um an increase in Risk we may start to see some of those flows coming with more Force which in turn will uh likely be supportive of gold but again there are different conditions that may uh be needed to kind you know create uh those those specific dynamics of lower interest rates or higher volatility and that's why we're keeping an eye on them right but Western investors can actually you know provide you know could provide quite a bit of support for gold given

the right conditions um India we it's also an important Market the Indian market actually was quite robust this year in part due to a uh reduction in in import duties that happen in the second half of the Year and that you know had a positive effect on both consumer and investment demand and actually gold investment in India has been gaining some momentum even though it's a smaller portion of the market so but we're keeping an eye on India for sure and then finally not necessarily and and

this is highlighting a couple of markets as I mentioned gold is global the Middle East matters southeast Asia and the US and and Europe through Western investors as I mentioned right but in addition to the the regions we're also keeping a close eye at uh what central banks are doing um central banks have been an important component uh of of demand for the past couple of years and have provided quite a bit of support for the gold price they reach record demand in both 2022 and 2023 and even though this year it may not break those

previous records it is still quite strong and well above average so uh as we look into 2025 um you know we still believe that Central Bank demand will remain robust and that will remain above average and as long as it remains above average that can still provide additional support for gos performance in terms of the central banks I think investors who are following the sector will know that's been a a big support for the price in recent years any any front runner countries that you see emerging in

2025 the most important thing for central banks is that is a very widespread phenomenon that is not just one or two central banks but actually you can see the contribution of many central banks uh throughout uh you know the past decade or so in fact even though investors have been paying a lot of attention to what central banks have been doing over the past two or three years the reality is that central banks have been net buyers of gold for uh almost 15 years now right and and it's really a combination of U various

emerging market markets from Asia from Latin America from you know other parts of the of the world as well and in even in recent years we have started to see even the velop market central banks ER contribute to to this trend we conduct a an annual survey where we ask Central Bankers for some of the key reasons why they add gold and what their expectations are about the next 12 months and so on and so forth and very consistently uh we continue to see uh uh responses like the the value that gold brings as a diversifier or the way that

it performs in in periods of Crisis as reasons why they continue to add gold to their reserves and in fact uh 80% of the central banks we surveyed responded that they expected overall Central Bank Reserves to increase over the next um um year when we ask in April we ask again to uh another subset of central banks in in October over in a in a forum we hold and we we saw a very similar response so I think a very consistent Trend we we see from them so you know and I think that makes it robust right because if

you were over reliant on a single central bank then that could create more challenges but because you s you have the contribution of many uh then you know you tend to see these strong numbers come out right so again important to keep that wider picture in mind and I am going to hone in on what's going on with with the FED just because you had mentioned interest rates a little bit earlier so we do still have one fed meeting left for this year later this week and the Very broad consensus is that we're going to get another 25

basis point cut to end the year is there any reason to think that we would get a surprise or any commentary you would add there generally speaking I think that uh the FED tries not to necessarily surprise a market unless it's very necessary right and and and the way that they do that that they Telegraph or they um provide guidance prior to meetings like they start to be very explicit or start to create perceptions that they may not necessarily move in one way or another uh ahead of a meeting because

obviously uh the FED doesn't necessarily want kind like volatility in the market so you know I would say that uh the most important thing here is generally speaking markets are expecting overall another 100 basis points or so uh between now and and and the end of 2025 and that's where consensus lies right so uh you know this is where the 2025 will play will will become quite interesting you know as to whether the fed and other central banks need to go beyond what is currently uh expected

given um you know the financial conditions or whether they need to um slow down a bit depending on how perhaps the inflation picture plays out yeah I think in the world go Council report it puts it quite nicely when it comes to the FED talking about walking a tight rope trying to engineer that soft Landing so it's been more successful than I think many people expected so far anything you would add on that tight rope for the FED in 2025 the one thing that I would add is that again historically speaking gold

has tended to perform well in in Cycles where the FED is easing so it has increased on average about 6% in the first six months since the cycle begins and the extent of or the the Contin of that performance is of course linked to how uh deep or how long the the FED Cod cycle you know will be so overall even though as as I mentioned at the beginning of of our conversation that uh we look at gold very holistically through the lens of a global um picture and a combination of drivers not just one it is still important to understand

that um us monetary policy has an effect not just in the US economy but has ramifications uh around the world and that's why it is important to you know for us to keep an eye on what happens uh um on on that front very makes a lot of sense and another B price driver that I wanted to make sure to bring up is the geopolitical angle so typically when I talk about this with different people I hear that geopolitical turmoil tends to have a short-term impact on the gold price if there is a big event but it

doesn't have that long-term lasting effect we've got all of these different hot points going on in the world right now I'm sure that will continue into 2025 anything that you would want investors to be aware of on that note yeah look I would say that go um geopolitical risk has both a direct and an indirect effect on gold prices so if the geopolitical risk is very very shortlived then yes then probably you can still see a spike that may revert back right but what has happened actually with the world right now is

that geopolitical risk has generally increased over the past couple of years and I don't say this just in terms of our sentiment you can look at as at indices such as a geopolitical uh Risk Index that is a widely followed index that um assess assesses and measures geopolitical risk and you can see a um structural shift between the levels seen you know prior to 2022 and what we we have seen since right which basic Bally means that overall the level of of of of risk and concern um you know for

investors is also higher right so that starts to to to weigh in and we have been you know seeing these as part of um you know one of the drivers that explains SK performance so you know again primary effect or direct effect that you can see through geopolitical risk when an action or an event or an invention or a um a um statement happens but also event ually if those continue for longer they start to have an effect on the economy on trade uh and other variables and that's the secondary effect that kicks in because gold is

going to respond to that right so the more widespread or the more um the longer a conflict lasts the more widespread different conflicts start to to to become uh the more likely you will continue to see um a reaction in Gold through geopolitical risk okay thank you for going into that one and on that note so Black Swan events these are inherently unknowable and really impossible to look forward to but anything on your mind on that note that you're watching heading into the new year so look it as you said ER you know

black swans are inherently uh impossible to predict um what I can tell you is that their frequency has increased so you don't know you do not know ex necessarily exactly what will happen what we do know is that we continue to see more and more of those right over the past several years which again in turn uh you know creates this perspective among amongst investors especially in a very interconnected Financial system that when something starts to unravel it not only affects one sector but it starts to have

ramifications and we've seen that happen in the past right so um so that is I I think that the main concern from investors not only you know perhaps that you cannot necessarily forecast exactly black one but that when they happen they tend to um spiral up fairly fast I think that's a great answer to that question just highlighting the increasing frequency all right as we're getting to the end here I know that the world gold Council doesn't make price predictions but anything you can say on the

direction of the gold price next year given all of these factors that we've gone over yeah so we don't we don't provide a direct uh Price Forecast but I think that we've created something for investors that is very useful which is a tool uh with that is called Quorum and that leaves on our website gold. HOV is available for anyone who wants to access it and it marries various microeconomic scenarios to how gold May perform under those those conditions by using you know the historical relationship between for

example consumer demand and and GDP or Price or investment demand and interest rates and risk and so on so forth so all of these very intuitive variables we create a very comprehensive view so we've built some of those scenarios uh based on external inputs either from uh consensus expectations or from other think tanks like Oxford economics right and explain how gold May perform under those um generally speaking ER consensus expectations if you plug in or if you take consensus expectations at face

value um those imply a more stable gold price for 2025 as we were discussing before you know consensus expectations not always happens exactly as planned and this is where various scenarios uh are interesting also to analyze um if uh interest rates and you know monetary policy were to go a bit further and interest rates to fall more or if we start to see more geopolitical risk or financial Market risk come up that may provide um support for gold beyond what we are seeing now H priced in and conversely if we may see a more

significant deceleration for example on on the economy part that may be accompanied by high interest rates that could have a a a more challenging or create a more challenging environment for gold as as opportunity cost increases but as we were discussing before you know economic growth may have an effect on on consumer demand okay well I'll I'll leave a link to that in the video description so people can take a look if they want to find out how to use it any final thoughts that you would

leave us with as we head into the new year just to highlight again you know the the important role that gold can play in portfolios as a diversifier as a source of return as a very liquid asset that can allow investors ER and and Empower investors to have a very diverse and and and well protected portfolio um and and again the fact that uh you know gold continues to perhaps surprise many investors in its um really useful role in terms of robust investment strategies okay I think that's a really strong note

to end on so thank you so much for coming on to review golden 2024 outlook for 2025 really good to have you and and hope to do it again in 2025 thank you so much for having me again of course and once again I'm Charlotte McLoud with investing news.com and this is JC artiguez with the world gold Council thank you for watching if you like this video make sure you hit the like button and subscribe to our Channel we'd also love to hear your thoughts so leave us a comment [Music] below e