The price of gold exceeded $5,000 per ounce for the first time in history, continuing a historic rally that saw the precious metal gain more than 60% within 2025. The surge comes during a period of heightened concerns over financial and geopolitical stability, as tensions between the US and NATO surrounding Greenland have worsened. At the same time, markets remain unsettled by the trade policies of US President Donald Trump. On Saturday, January 24, 2025, Trump threatened to impose 100% tariffs on Canada if it proceeds with a trade agreement with China. Gold, like other precious metals, is considered a "safe haven" for investors during times of uncertainty. On Friday, silver also surpassed $100 per ounce for the first time, continuing an impressive rise that approached 150% the previous year.
Everyone is "running" for gold
The increased demand for precious metals is also attributed to other factors, such as persistently high inflation, the weakening of the US dollar, massive purchases by central banks worldwide, and expectations that the Federal Reserve will proceed with new interest rate cuts during the year. The wars in Ukraine and Gaza, as well as the arrest of Venezuelan President Nicolás Maduro by Washington authorities, have also contributed to the rise in the gold price. One of gold's primary advantages remains its relative scarcity. According to the World Gold Council, a total of approximately 216,265 tons of gold have been mined throughout history—a quantity sufficient to fill just three to four Olympic-sized swimming pools.
Most of this quantity was mined after 1950, as mining technology evolved and new deposits were identified. The US Geological Survey estimates that approximately 64,000 tons of gold still remain in underground reserves, although the global supply is projected to stabilize in the coming years. "When you own gold, you do not depend on someone else's debt, as is the case with a bond or a stock, where the return depends on a company's performance," stated Nicholas Frappell, head of institutional markets at ABC Refinery. "It is an excellent diversification tool in a world full of uncertainty," he added.
"The world is turning to gold"
2025 proved to be a milestone year for gold, with the largest annual increase since 1979, as investors turned en masse to precious metals. Markets were shaken by concerns over Trump's tariffs, but also by fears that stocks related to artificial intelligence are overvalued, leading gold to successive all-time highs. "A large part of this rise is due to the extreme uncertainty surrounding US policy," noted Nikos Kavlis from the consultancy firm Metals Focus.
The price of gold also tends to rise when investors expect interest rate cuts. Lower interest rates limit the returns on investments such as bonds, making gold and silver more attractive options. The Federal Reserve is widely expected to cut its benchmark rate twice during the year. "There is an inverse correlation, because the opportunity cost of holding money in government bonds is no longer worth it, so the world is turning to gold," stated Ahmad Assiri, Research Strategist at Pepperstone.
It is not only investors who are increasing their purchases. In 2024, central banks added hundreds of tons of gold to their reserves, according to the World Gold Council. "There is a clear shift away from the US dollar, something that benefits gold to a huge extent," noted Kavlis. Although the rally continues into 2026, Frappell warns that a market driven strongly by news can just as easily retreat. "There is always the possibility of unexpected developments that would be positive for the world, but not necessarily for gold," he said.
The role of Asia
At the same time, gold continues to hold strong cultural significance. In many countries, it is purchased during holiday periods or offered as a gift at weddings and other celebrations. In India, the Diwali festival is considered an ideal time for purchasing precious metals, as they are believed to bring wealth and good luck. According to Morgan Stanley, Indian households hold gold worth $3.8 trillion—an amount corresponding to 88.8% of the country's GDP.
Neighboring China constitutes the largest single gold consumption market worldwide, with many believing that buying it brings good fortune. "We often observe a seasonal increase in demand around the Chinese New Year, something we are also seeing during this period," mentioned Kavlis, referring to the upcoming Year of the Horse, which begins in February.
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