Gold edged lower on Thursday as escalating Middle East tensions vied with anticipation of the US non-farm payrolls report. The precious metal, which rallied 44% in 2025, remains supported by geopolitical risk while a strong jobs print could strengthen the dollar and pressure prices. Metals Focus forecasts the yearly average gold price will surge 43% to a record $4,920 an ounce this year.
Gold edged lower Thursday, paring some of its 44% rally in 2025, as Middle East tensions supported safe-haven demand ahead of the US jobs report.
"The drivers from 2025 remain intact: ongoing US policy uncertainty, persistent concerns about the dollar's long-term outlook, elevated geopolitical risks, and stretched equity valuations," Matthew Piggott, gold and silver director at Metals Focus, said. "Together, these factors reinforce gold's role as a safe haven and portfolio diversifier, and we expect further all-time records to be achieved later this year."
Gold rallied 44% in 2025, its best annual performance since 1980, according to Metals Focus. Global gold mine production grew 2% year-over-year to 3,817 metric tons in 2025, driven by new mines, expansions and higher artisanal mining. All-in sustaining costs rose 12% to $1,552 an ounce, underpinned by higher royalties and inflationary cost pressures. Net official sector purchases fell 22% to 848 tons, a four-year low, though buying remained geographically widespread as US policy uncertainty encouraged further diversification. Physical investment rose 16% to a 12-year high, with exchange-traded product holdings increasing by 803 tons, the highest yearly inflow since 2020.
The US non-farm payrolls report due Friday will be the next key driver for gold prices. A strong employment print could strengthen the dollar and pressure gold, while a weak reading would reinforce the case for rate cuts and support further gains. Metals Focus forecasts the yearly average gold price will surge 43% to a record $4,920 an ounce this year, with further all-time highs expected later in 2026.
Global jewellery fabrication fell 19% to 1,646 tons in 2025, a five-year low, as high prices prompted light-weighting, carat shifts and substitution from gold to platinum and plated alternatives, Metals Focus data shows. The decline is expected to continue by an additional 11% this year, leaving fabrication only above the Covid-19-impacted 2020 level. China and India led bar and coin investment gains with 28% and 17% growth, respectively, as consumers shifted away from jewellery in favor of bars and coins.
Recycling rose 2.8% to 1,404 tons in 2025, a 13-year high, though gains were limited by low near-market stocks and the desire to retain gold as a safe haven despite sharply higher prices. Scrap supply is forecast to rise 5.1% this year. Gold mine supply is forecast to increase 2.4% to 3,907 tons in 2026 as output strengthens in all regions except Oceania and Europe.
Tariff uncertainty, rising US debt, concerns over the independence of the Federal Reserve, and ongoing geopolitical turmoil have all enhanced gold's investment appeal, Metals Focus noted. Electronics demand was effectively unchanged in 2025 as gains from AI infrastructure expansion were offset by weakness in consumer electronics.
This article is for informational purposes only and does not constitute investment advice.
