Why is the price of gold rising in 2025? Key factors and analysts’ insights
The price of gold has risen significantly in recent times, reflecting growing investor interest in uncertain times. The market is filled with excitement, but also with tension and uncertainty. Over the past year, the price of gold has increased by more than 40%. At the end of April 2025, it climbed above $3,500 (£2,630) per troy ounce (the standard measurement for precious metals). This marks an all-time record (even after adjusting for inflation), surpassing the previous peak reached in January 1980, when the price was $850—or $3,493 in today’s money. Below, you can explore the key factors driving the current rise, and on our portal you can also find a chart showing the real-time gold price.
Economists have attributed the recent surge to several factors, highlighting unpredictable shifts in U.S. trade policy that have shaken global markets. In contrast to market unpredictability, gold is widely seen as a safe investment. Fears of geopolitical instability have only increased its appeal. Many investors have come to appreciate the relative stability that this precious metal offers. Analysts describe the current geopolitical environment as a fatal combination of circumstances that has triggered a modern-day gold rush.
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What has really triggered the gold rush?
Due to its relative scarcity, gold has for centuries been considered a safe store of value. However, the global supply of gold is limited. According to data from the World Gold Council, only about 216,265 tonnes have been mined so far (with the total amount currently increasing by around 3,500 tonnes per year). This means that gold is generally perceived as a “safe haven” that will preserve and increase its value in the long run. As an investment, however, gold has both advantages and drawbacks.Unlike stocks, investing in gold does not provide dividend payouts. And unlike bonds, gold does not offer a steady, predictable income, while its industrial uses are relatively limited.
The appeal of gold lies in the fact that it is a physical asset that exists outside the banking system. For this reason, it is often used as an insurance policy against inflation: while currencies lose their value over time, gold does not.Recently, there has been a significant increase in demand for gold from so-called exchange-traded funds (ETFs)—investment vehicles that hold assets such as gold, while allowing investors to buy and sell shares in the fund.These funds are popular among large institutional investors, whose actions have contributed to driving the price higher.
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History repeats itself: geopolitical conditions and the price of gold
When gold reached its previous record in January 1980, the Soviet Union had just invaded Afghanistan. Oil prices were rising sharply, which increased inflation in developed economies, and investors sought to protect their wealth. The price of gold also rose sharply after the global financial crisis, leading to a new peak in 2011.Recent increases appear to be largely the result of how markets have reacted to the uncertainty triggered by U.S. trade policy.
The latest surge came after the U.S. president launched an attack on the chairman of the Federal Reserve. He called for an immediate cut in interest rates and described him as a “big loser” for failing to lower borrowing costs quickly enough.Some interpreted his remarks as an attack on the independence of the Federal Reserve. Stock markets fell, as did the value of the U.S. dollar against other major currencies. And gold reached a new record high.However, the recent strength of gold cannot be fully explained by such actions alone.
Central banks and the fear of the dollar system being used as a “weapon”
Since 2022, central banks have purchased more than 1,000 tonnes of gold each year, compared to an annual average of 481 tonnes between 2010 and 2021. The central banks of Poland, Turkey, India, Azerbaijan, and China were among the leading buyers last year. Analysts say that central banks may be trying to build up reserves amid growing economic and geopolitical uncertainty.In 2022, the reserves of the Russian central bank were frozen following the invasion of Ukraine, and reserve managers at central banks around the world began to fear that their own holdings might not be safe either. As a result, they started considering buying gold and storing it in vaults.This represents a structural fivefold increase in gold demand from central banks.The need for independence from dollar-based banking systems has been one of the main driving forces behind these actions, according to some analysts.Another common factor may also be pushing the price of gold higher: FOMO — the fear of missing out. As gold prices reach record highs, the topic has entered everyday conversations. Individual investors want their piece of the golden pie, and they can do so by buying physical gold.
The movement of gold prices in the near future: what do analysts think?
Some experts believe that the upward trend will continue, driven by unpredictable U.S. policies, inflationary pressures, and central bank purchases. Goldman Sachs has actually forecasted that gold will reach $3,700 (£2,800) per ounce by the end of 2025 and $4,000 (£3,000) by mid-2026. They added that in the event of a U.S. recession or an escalation of trade wars this year, gold could even hit $4,500 (£3,400).Analysts explain that even a small shift in large stock or bond markets could translate into a significant percentage increase in the much smaller gold market. In other words, it doesn’t take major turbulence in larger investment markets to push gold upward.Is there a risk of a gold market crash due to inflated value?Analysts believe there could be a short-term decline, but prices will generally continue to rise. In this highly uncertain geopolitical environment, where central banks are seeking safer reserves, many expect that demand will remain strong in the medium term.However, there could be a pause in the upward trend, given gold’s astonishing growth so far. Most experts agree, though, that gold prices will continue to rise in the long term. One challenge for investors is determining whether the recent record high was merely the starting point of a further long-term climb.Short-term speculation may fail, as such investments always carry inherent risks. Long-term investments—which in the case of gold are the most suitable—do not carry significant risk, even at record price levels.
Gold is on the rise – are you ready to seize the opportunity?
In times of uncertainty and market volatility, gold once again proves its value as a reliable investment. Its growth is no coincidence—it reflects global trends, inflationary pressures, and investors’ confidence in safe-haven assets.If you’re considering investing in gold or want to learn how this precious metal can complement your portfolio, we’re here to help.Get in touch with us—as experienced experts in the precious metals market, we’ll be happy to advise you on how to make the best decisions for your financial future.
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