\n<\/p>\n
It is turning into gold\u2019s best year in decades. Bullion has hit a series of record highs in 2025, putting it firmly on track for its strongest annual performance since 1979, when revolution in Tehran rocked the global economy.<\/p>\n
The short answer is that gold is acting as a haven and a store of value, a role it\u2019s played for thousands of years, since the kingdom of Lydia started churning out gold coins in the sixth century BC. Investors can be a jumpy lot, and there are plenty of reasons to shift money out of riskier assets today \u2013 from fears of economic slowdown to rising geopolitical tensions between Russia and Nato.<\/p>\n
As well as traditional valuation drivers such as interest rates, the dollar and inflation, concerns over Donald Trump\u2019s attacks on the US central bank, his trade war, and his tax and spending plans are also pushing gold higher, analysts say.<\/p>\n
Gold\u2019s role as a store of value comes, in part, from its scarcity. According to the World Gold Council, if all the gold ever mined was gathered into a single cube, it would measure approximately 22 metres on each side.<\/p>\n
Total supplies are rising by an estimated 1.7% a year. That means \u201cno policy, no discovery, no quantitative easing of geology\u201d can debase gold, says Stephen Innes, managing partner at SPI Asset Management.<\/p>\n
That makes it attractive when investors worry that governments are losing their grip on the public finances \u2013 finding it politically unpalatable to raise taxes, and impossible to cut spending.<\/p>\n
Copper, in contrast, can\u2019t operate as a store of value as huge quantities are used, and consumed, each year, with demand set by the health of the global economy.<\/p>\n
Platinum and palladium fail this test too, despite an ounce costing over a thousand dollars as new supplies are quickly swallowed up by industry.<\/p>\n
Since 1 January, the spot price of gold has risen by a blistering 45% to a record high of $3,831 per ounce on Monday. That outpaces all other leading asset classes this year.<\/p>\n
Gold hasn\u2019t had such as strong year since 1979, when it jumped by 126% as Iran\u2019s revolution led to a surge in the oil price, crushing investors\u2019 hopes that inflation could be tamed.<\/p>\n
A line graph showing the price of gold steadily rising since the 1970s<\/p>\n
Data from Bank of America (BofA) on Friday shows that $5.6bn flowed into gold last week. Over the past four weeks, the bank says there were record inflows of $17.6bn.<\/p>\n
BofA cautions that gold is tactically \u201coverbought\u201d, but structurally \u201cunder owned\u201d \u2013 as it only represents 0.4% of private client assets under management. It is maintaining a long position on gold, indicating it expects the price to keep rising.<\/p>\n
Gold has further to rise, analysts predict. Arnab Das, global macro strategist at Invesco, for example, says the gold rally still \u201chas legs\u201d.<\/p>\n
\u201cWe see no true alternative to gold as a hedge against US risks and expect central banks to keep buying gold \u2026 In my view, central banks are buying gold because they see no fiat alternative to the dollar,\u201d Das says.<\/p>\n
The World Gold Council says western investors and speculators have been the drivers of the recent price gains.<\/p>\n
They cite two reasons. First, evidence that a slowing US economy will allow the US Federal Reserve to lower interest rates further. That means the interest on cash reserves will be lower, making it less attractive compared with gold (which doesn\u2019t provide a yield).<\/p>\n
Second, increased rhetoric against the Fed and its independence from the Trump administration is leading to concerns about the stability of the US dollar and the Treasuries market.<\/p>\n
A bar chart showing how much the price of gold has grown since the late 1970s<\/p>\n
Central banks have also been adding to their gold reserves in recent years. Notably China. Bloomberg reported this week that China aims to become custodian of foreign sovereign gold reserves in an attempt to strengthen its standing in the global bullion market, and become less dependent on the dollar and western centres like the US, the UK and Switzerland.<\/p>\n
Overall, markets have not been badly hit by the jump in US tariffs this year to the highest level since the 1930s. But the most obvious vehicle of trade war worry has been the US dollar.<\/p>\n
M&G fund manager Eva Sun-Wai told M&G\u2019s Bond Vigilantes forum last week that this has led to a \u201cbroader de-dollarization trend, which has caused angst in markets\u201d.<\/p>\n
\u201cAnd I think it\u2019s a big reason why gold, for example, has become the safe haven choice,\u201d Sun-Wai added, as investors go for gold when they don\u2019t want to buy the dollar or expose themselves to the risk of interest rate moves by holding bonds.<\/p>\n
The greenback is enduring a bruising 2025 \u2013 down more than 9% so far this year, amid concerns about Fed independence and those trade war concerns. That mechanistically lifts the value of gold in dollar terms.<\/p>\n
\u201cCaveat emptor\u201d certainly\u00a0applies, given the edginess among investors that asset prices might generally have risen too high. But some experts do see more value\u00a0in gold \u2013 earlier this month,\u00a0Deutsche Bank raised its gold price forecast for 2026 by $300, to $4,000 per ounce.<\/p>\n
You can buy physical gold, perhaps from the Royal Mint, which sells gold coins and bars. The bulk buying chain Costco even stocks gold bars, which often sell out, perhaps because of the precious metal\u2019s popularity with doomsday preppers. But \u201csuch investments come with extra costs and complications, however, like insurance and storage,\u201d says Jemma Slingo of Fidelity International.<\/p>\n
Alternatively, you could put money into a gold exchange\u00a0traded fund (ETF), which closely\u00a0mirror movements in the gold price.<\/p>\n
Another option is to buy shares in gold miners, such as Fresnillo, whose share price is up 250% so far this year.<\/p>\n
There is a risk, though, of a pullback in gold after such strong gains, or a more sizeable drop, perhaps if inflation falls back towards central bank targets, or geopolitical crises ease.<\/p>\n","protected":false},"excerpt":{"rendered":"
It is turning into gold\u2019s best year in decades. Bullion has hit a series of record highs in 2025, putting it firmly on track for its strongest annual performance since 1979, when revolution in Tehran rocked the global economy. Why is gold in such demand? The short answer is that gold is acting as a<\/p>\n","protected":false},"author":1,"featured_media":24803,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[10762,15036,129,14773,1033,1099],"class_list":{"0":"post-24802","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-bonanza","9":"tag-bullion","10":"tag-gold","11":"tag-highs","12":"tag-hitting","13":"tag-record"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/24802","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=24802"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/24802\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/24803"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=24802"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=24802"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=24802"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}