Will Gold Reach $3000? Everything You Need to Know

By Tim Schmidt - UPDATED: February 8, 2025

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This year aims to be one of the best ones to purchase gold bars and coins. Over the past year, gold bullion's price has increased by an impressive margin, with some experts claiming that it could reach $3,000 soon.

With central banks holdings piling up and investors interested in gold purchases because of the lower interest rates, there's no doubt that this precious metal will keep seeing exponential growth over the following months.

Below is an analysis of the current situation with gold holdings, including the reasons central banks are increasing their buying of precious metals, which factors are affecting them, and more.

An Overview of the Gold Market

At the time of writing, the price of gold is around $2,758.80. That's not what's impressive about the market, though.

will gold hit 3000

According to Money.com, the price of gold increased about 29% in 2024, going from $2,076 to $2,637. Analyzing the information, you can see that gold prices have even outpaced the growth of the S&P 500, which is an index that tracks the performance of 500 leading companies in the United States.

Will gold reach $3000, though? As you can see, gold is only a few hundred away from getting to $3,000. Even though some experts believed that this asset would reach that number in 2024, it didn't make it. What can we expect for 2025?

Considering how near we are to $3,000, there would be no surprise if gold finally reaches that amount this year. However, it may be hard to tell exactly when that will happen. It all depends on several factors, which we'll talk about below.

What's Affecting Gold Prices in 2025?

Gold bullion sitting on a table

There are many theories regarding why the price of gold has increased that much. One of the main reasons why this has happened is the increasing concern about the risk of financial sanctions, leading to sizable central bank purchases across the globe.

Since Russian central bank assets were frozen in 2022, following the country's invasion of Ukraine, there has been an increase in central bank purchases of gold, according to Goldman Sachs Research.

Another important factor to consider is that central banks in developed markets tend to have relatively high holdings of this precious metal as a reserve share. Countries like France, Germany, Italy, and the United States, have holdings that make up to 70% of said reserves.

What about emerging market counterparts? China, for example, has a smaller share, with about 5% of its reserves in the precious metal. It seems like many central banks in these markets are trying to catch up to those in developed countries.

Goldman Sachs Research expects holdings in Western ETFs to increase as interest rates fall. There may be some competition for gold bullion between Western investors and central banks if ETF holdings start to get higher.

To summarize, many investors want to hold gold now because of the lower interest rates. When these rates are higher, investors tend to keep their wealth in safe investments like CDs or Treasury bonds. However, as the rates fall, the demand for gold increases. This is because people want to compensate for the reduced rates, so they look for alternative investment options.

On the other hand, central bank buying of gold may increase due to the factors mentioned previously, leading to much higher holdings. Here's a summary of all the factors affecting gold prices:

How Can You Start Investing in Gold?

This could be a great time for you to consider investing in gold. However, you must create a strategy that aligns with your goals and needs.

As an investor, you have access to many ways to put your money into gold. We'll cover some of the most popular ones below:

Physical Gold

Physical gold is excellent if you want to possess the item itself. However, you may have to spend extra money on insurance and storage. Also, it may be hard for you to find a buyer when you want to liquidate your holdings.

When buying physical gold, make sure to find a reliable dealer.

Exchange-traded Funds (ETFs)

ETFs allow you to access gold without having to buy or store the physical metal. Depending on your needs, you can consider a basket of gold stocks or an ETF that tracks the performance of the metal's price.

One of the main benefits of ETFs is that they may provide higher liquidity, and you can buy and sell them on many market exchanges.

Stocks

Gold stocks include publicly traded companies that work with gold manufacturing in some way. They also include companies representing gold streamers/miners or jewelry makers. You may get higher liquidity with this method compared to physical gold.

Futures

Futures allow you to get indirect exposure to gold price movements. They may represent a higher risk, but you could also get positive returns over time.

Things You Should Consider When Investing in Gold

When it comes to buying gold, always remember to diversify your investments. Some people combine gold ETFs with physical metals and mining stocks to keep their portfolios flexible while maximizing their growth potential.

Also, don't rely on gold as your only asset. A good rule of thumb is to invest up to 10% of your portfolio in gold to protect your wealth. In some cases, you could invest up to 15%.

Bottom Line

Gold offers many benefits to investors, such as hedging against many situations, including debt fears, trade tensions, and even a Federal Reserve subordination risk.

It's more than likely that gold's price will get to $3,000 soon, so make sure to stay up-to-date on the latest news and create a solid investment strategy if you want to get this precious metal for your portfolio.

Tim Schmidt

About 

Tim Schmidt is an Entrepreneur and Serial Investor. Since 2012 he's been an advocate of alternative investments using a Self Directed IRA. His work has been featured in Yahoo! Finance, USA Today, Business Insider, and Tech Times, among others. Get his portfolio breakdown here.

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