Gold shines bright in 2025
Gold has been sizzling this year. Prices have jumped some 30% this year, hitting a record high of $3,500 an ounce in April of 2025. That’s higher than earlier forecasts from major banks like J.P. Morgan, and it has left many people asking themselves: can gold keep climbing?
The answer, according to analysts, is yes. The coup of geopolitical tensions, trade wars, and economic uncertainty has made gold the favourite of the markets. Prices could even touch $4,000 an ounce in the next year or two, believe some.
Why gold prices are rising
Gold has always been thought of as a safe haven—a place where investors place their money when things are not going well. Contrary to stocks, bonds, or even currencies, gold retains its value when markets are uncertain.
Several factors have propelled the rally this year:
- The uncertainty born out of U.S. trade and tariff policy.
- The fear of recession is keeping investors nervous.
- Geopolitical uncertainty throughout the world is fuelling demand for safe assets.
- Weaker currency and softer interest rates have made gold even more attractive as well.
As J.P. Morgan Global Commodities Strategy head Natasha Kaneva put it, “We remain deeply convinced of a continued structural bull case for gold.”
Forecasts point to even higher prices
In the short term, J.P. Morgan sees gold averaging $3,675 an ounce in late 2025 and rising toward $4,000 in mid-2026.
The company risks are biased towards prices overshooting such levels in the event demand continues to surprise to the upside. That means gold could be making records at a rate even more accelerated than expected.
Central banks keep buying
The central banks have been among the biggest driving forces of the rally in gold. Central banks across the world have been accumulating gold in their reserves at record highs.
In 2025, purchasing will amount to 900 tonnes altogether, with a trend that’s already been continuing for three straight years. Why? The majority of nations are keen on diversifying away from the U.S. dollar. With trade wars and shifting global alignments, gold seems a better option.
By the end of 2024, global central bank gold holdings had hit approximately 36,200 tonnes—nearly 20% of official reserves. For perspective, that share was only 15% just one year ago.
The United States, Germany, France, and Italy maintain the top ranks among world reserves, with nearly half of all gold accounted for. Emerging nations like Poland, Türkiye, India, and China have also been significant buyers in recent years.
Gregory Shearer, J.P. Morgan’s Base and Precious Metals Strategy chief, summarised it thus: “Central banks are not finished with gold yet, with more political upheaval to drive a sustained rebound in 2025.”
It’s not only governments that are purchasing
It isn’t only governments that are purchasing gold—private investors are also getting in on the act. Futures markets, gold exchange-traded funds (ETFs), and physical bar and coin demand have all soared.
- Gold ETFs: Global holdings rose solidly in 2025, while US ETFs grew by nearly 10% and Chinese ETFs by 70%.
- Physical gold: Coins and bars under the control of private investors grew to 45,400 tonnes, according to the World Gold Council.
- Total investor gold: Combined holdings are now worth approximately 49,400 tonnes, valued at more than $5 trillion.
This suggests that investors still see gold as one of the top inflation, recession, and market turmoil hedges.
The Function of Interest Rates and Inflation
Gold historically glows brightest when interest rates are low. That is because gold doesn’t pay interest or dividends, so it’s more attractive when options like U.S. Treasuries or savings accounts are paying less.
But in the current environment, gold is performing well even without aggressive rate reductions. And that’s because investors consider it to be a hedge against stagflation—a combination of stagnant economic growth and high inflation. With so much policy uncertainty, many are turning to the safety of bullion.
Risks that could push gold higher
Several risks could continue propelling gold higher, experts believe:
- Global recessions caused by trade tensions.
- Currency debasement or inflation that diminishes purchasing power.
- Geopolitical stresses that usher in economic uncertainty.
- US policy changes under duress from global trade wars.
Essentially, the same factors that worry investors about what lies in store are exactly the motivations for why gold can continue to shine.
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Last thoughts: Is $4,000 next?
Since gold is already at all-time highs, most wonder if the rally has legs. Most analysts have an unequivocal answer: yes, it does.
Solid central bank purchases, growing investor demand, and ongoing uncertainty all point towards additional gains to follow. Along the way, prices will likely bump up and down, but the longer-term trend looks bullish.
If forecasts hold, gold could average at about $3,700 an ounce at the end of 2025 and hit close to $4,000 in 2026. For anyone who’s been tracking markets, this one’s for certain: gold is on the centre stage again, and its bull run is definitely not over yet.
