Gold Prices Decline, But Experts Predict a Major Surge Ahead

Global gold prices have been under the spotlight recently due to a sharp decline. Previously, gold had soared as investors turned to safe haven assets amid global uncertainty.

As of Friday, May 2, 2025, gold prices slipped slightly by 0.01% to US$3,240.08 per troy ounce. This marked the fourth consecutive day of losses. The commodity had peaked during intraday trading on April 22, 2025, reaching US$3,500.05 per troy ounce, but has since been on a downward trend.

Several factors have contributed to this decline. A key reason is the easing of trade tensions between the United States and China, which triggered widespread selling of gold as a traditional hedge asset. Additionally, a slight slowdown in US job growth in April has also weighed on the metal's performance.

Another contributing factor is the Federal Reserve’s stance on interest rates. Policymakers signaled they would maintain short-term interest rates at current levels while waiting for clearer evidence that inflation is approaching the Fed’s 2% target or that labor market conditions are worsening.

Despite the current drop, renowned investor and billionaire John Alfred Paulson — known for profiting immensely during the global financial crisis — believes gold prices could surge to nearly US$5,000 per troy ounce by 2028. He attributes this projection to escalating global tensions and large-scale gold buying by central banks.

Paulson sees gold as the ultimate store of value during uncertain times.

“This is a well-grounded and rational forecast. As central banks and individuals look for more stable stores of value, gold’s role in the global economy will strengthen,” he told CNBC International, quoted Sunday (May 4, 2025).

Paulson also expects that in the next three years, gold will likely reach around US$4,000 before making further gains.

“Reaching the US$4,000 range in three years is a very reasonable expectation,” he told Reuters.

He warned that the global — and particularly the US — economic outlook is not promising. As confidence in the US dollar erodes, investors may increasingly turn to gold instead.

“When your faith in the dollar begins to fade, gold becomes the best alternative as a reserve currency,” he emphasized.

For context, Paulson is the largest shareholder of Perpetua Resources, a mining company focused on gold and antimony in Idaho. He also purchased a 40% stake in NovaGold’s Donlin project in Alaska from Barrick.