2025 Markets Forecast: How Surging Gold and a Weakening Dollar Could Impact Your Investments and Business Strategies
LONDON — Most investors anticipated a unique market environment in 2025 with Donald Trump’s return to power in the United States, but few foresaw the extent of its volatility or the final outcomes.
Global stocks rebounded strongly from the April “Liberation Day” tariff-induced downturn, achieving a 21% gain for the year, marking the sixth consecutive year of double-digit returns in the past seven. However, other asset classes delivered strikingly unexpected results.
Gold, traditionally a safe haven in turbulent times, surged nearly 65%, its best performance since the 1979 oil crisis. The US dollar declined by almost 10%, oil prices fell by nearly 18%, yet the riskiest junk bonds rallied robustly in the debt markets.
Among US tech giants, the so-called “Magnificent Seven” have lost some momentum since Nvidia, a leader in artificial intelligence, became the first company valued at $5 trillion in October. Meanwhile, Bitcoin experienced a sharp decline, losing about a third of its value.
Bill Campbell, fund manager at DoubleLine, described 2025 as “the year of change and surprises,” noting that the major market movements are interconnected through the overarching themes of trade tensions, geopolitical unrest, and debt concerns.
Campbell remarked, “If you had told me beforehand that Trump would pursue aggressive trade policies in this sequence, I wouldn’t have expected valuations to remain as elevated as they are today.”
European defense stocks surged by 56%, fueled by Trump’s indications that Europe would have to increase its military expenditure due to a reduced US commitment to the region’s defense, impacting NATO dynamics. This contributed to European banking stocks enjoying their strongest year since 1997. Additionally, South Korean equities jumped 75%, and defaulted Venezuelan bonds nearly doubled in value. Precious metals silver and platinum soared by 145% and 125%, respectively.
Monetary policy also shaped bond markets significantly. Three US interest rate cuts, Trump’s public criticism of the Federal Reserve, and broader debt anxieties influenced yields. The 30-year US Treasury yield peaked at over 5.1% in May—its highest level since 2007—before retreating to 4.8%. However, the widening spread to short-term rates, referred to by bankers as “term premia,” has rattled markets anew. Japan’s 30-year yields also hit record highs. Paradoxically, global bond market volatility remains at a four-year low, and local-currency emerging market debt recorded its best year since 2009.
Currency markets saw notable shifts. The dollar’s decline boosted the euro by nearly 14% and the Swiss franc by 14.5%. China’s yuan breached the 7-per-dollar mark, while the Japanese yen remained flat following substantial losses in December. Trump’s renewed engagement with Russian President Vladimir Putin helped Russia’s rouble surge 40%, despite ongoing sanctions.
Jonny Goulden, head of emerging market fixed income strategy at J.P. Morgan, commented, “We believe the 14-year bear market cycle for emerging market currencies has turned.”
In the cryptocurrency sphere, Trump launched a memecoin and granted a presidential pardon to Binance founder Changpeng Zhao. Bitcoin hit an all-time peak above $125,000 in October but later crashed below $88,000, ending the year down over 6%.
Looking ahead, Trump is gearing up for the November midterm elections and is expected to appoint a new Federal Reserve Chair soon, a move that could significantly affect the central bank’s independence.
Investors will also closely monitor China’s economic performance and the ongoing challenges in resolving the Ukraine conflict.
Matt King, founder of Satori Insights, described the market’s valuation status entering 2026 as “remarkable,” cautioning, “There remains a persistent risk that we are pushing the limits of what easy money can achieve.”
— Reuters
Special Analysis by Omanet | Navigate Oman’s Market
The turbulent yet opportunistic global market shifts under Trump’s aggressive trade policies and geopolitical maneuvers signal heightened volatility but also unique investment openings. For businesses in Oman, this means diversifying portfolios into resilient assets like precious metals and emerging market debts could shield against external shocks. Smart investors should closely monitor US-China economic dynamics and midterm election outcomes, which will critically shape global liquidity and trade environments impacting Oman’s strategic growth opportunities.
