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Market Review 2025

Investment Outlook

Global economic and macro backdrop

  • According to the International Monetary Fund (IMF), global GDP growth in 2025 is forecast to slow compared to 2024, reflecting weak demand, trade uncertainty, and structural headwinds. 

  • For 2025 overall, many forecasters expect global growth to be in the ballpark of 2.9 %–3.2 % — notably down from earlier years. 

  • For major advanced economies (e.g. Euro area), growth is much more modest. For example, the European forecasts (spring 2025) put euro-area growth at around 0.9 %. 

  • Inflation dynamics are gradually improving but remain uneven. In the euro area, headline inflation is forecast to drop to around 2.1 % in 2025, with further easing into 2026 (1.7 %).

 

Bottom line: 2025 has been a year of global deceleration, reflecting structural headwinds, trade friction and cautious business/investor sentiment — but outright collapse has largely been averted.

 

Major financial markets & recession / volatility risks

  • A dramatic shock came early in 2025: when sweeping global tariffs were announced by the U.S., global equity markets tumbled. The S&P 500 and Nasdaq Composite both suffered their worst quarterly performance since 2022 in Q1: S&P fell ~4.6%, Nasdaq plunged ~10.5%, while the Dow Jones Industrial Average also dipped.

  • The sudden tariff-driven sell-off triggered a broad flight from risk assets, especially in the U.S. and many export-dependent economies. Markets entered “bear territory” as investors panicked over recession and trade-war contagion. 

  • Despite that volatile start, through 2025 markets have shown some resilience: trade tensions moderated, some policy responses came through, and risk appetite returned at times — though volatility remains elevated. 

  • In many regions, slower growth and mixed corporate earnings — together with elevated geopolitical and macro uncertainty — have kept investor sentiment cautious. 

 

Recession risk: Analysts continue to warn of potential recessions, especially if trade tensions re-escalate or if global demand weakens further. That said — a full global recession has so far been avoided, but downside risks remain.

 

Inflation & Monetary Policy Conditions

  • Globally, inflation appears to be gradually easing, though unevenly: the IMF expects global inflation to fall in 2025 and 2026 versus the elevated levels of previous years. 

  • In the euro area, inflation is forecast to recede to ~2.1 % in 2025 and ~1.7 % in 2026.

  • This disinflation — combined with weak growth — may push central banks (outside the U.S.) toward a modestly looser monetary policy stance. 

  • However, policy uncertainty remains high in many regions, especially given uneven economic recovery and external shocks (trade tensions, geopolitical risk, supply-chain disruption). 

Overall: inflation is no longer the persistent runaway problem seen in prior years, but real growth remains fragile — a tricky balance for policymakers.

 

Global Gold Market — 2025: A “Safe-Haven” Boom Year

  • 2025 has been a standout year for gold. According to the World Gold Council (WGC), first-quarter gold demand soared to the highest level since 2016, with ~1,206 tonnes, driven by geopolitical uncertainty, trade tensions and general macroeconomic jitters.

  • As a result, gold prices rocketed: the metal breached $3,000 per ounce early in the year and by October surged past $4,000 per ounce, marking a more than 50 % gain in 2025. 

  • Key drivers of the rally: safe-haven demand amid risk-off sentiment, weakening U.S. dollar, expectations of slower global growth/inflation, and central bank (and institutional) buying. 

  • The WGC calls 2025 one of the strongest years for gold in decades — reflecting a structural shift: investors are increasingly using gold as a hedge against macroeconomic and geopolitical risks. 

 

Outlook for 2026 — What Could Shape the Next Year

  • Global growth is likely to remain subdued: some forecasts suggest growth around ~3.1 % globally in 2026, with advanced economies inching up modestly and emerging markets a bit stronger but vulnerable. 

  • Inflation in many regions is expected to continue easing — particularly in Europe, where central banks may shift toward rate cuts or looser monetary stance if growth remains weak. 

  • For gold: many analysts expect the bullish trend to persist in 2026. According to recent forecasts, average gold prices could settle at ~$4,150/oz (barring dramatic macro shifts). 

  • But there are multiple potential scenarios:

    • If economic slowdown deepens or new geopolitical risks arise → “safe-haven” demand could push gold higher.

    • If global growth recovers meaningfully and yields rise → risk assets may regain favour, possibly cooling gold’s rally.

    • Continued central bank gold purchases and diversification away from fiat currencies may keep underlying demand strong. 

  • For equities: much depends on whether global trade tensions ease, and whether economic growth stabilises. Absent improvement, equity markets may remain volatile; but if growth edges up and interest rates fall, risk assets might regain traction.

 

Overall Takeaway: 2025 = Pivot Year — Cautious, Complex, with Flashpoints

2025 has not delivered a boom — but neither a collapse. Rather, it's been a pivot year: modest growth, disinflation, but persistent uncertainty from geopolitical risk and trade policy. Equity markets were shaken, but not broken. Meanwhile, haven assets — especially gold — soared, reflecting a broader shift in investor sentiment toward risk aversion and portfolio hedging.

Looking into 2026: many of the same structural pressures remain. Growth is unlikely to bounce back strongly. But today's fragilities also create opportunities — especially for investors seeking diversification, safe havens, or asymmetric returns should global conditions deteriorate.

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