The prices of Gold rose by more than 36% over the past year, reaching a record high of $3237 per ounce on April 13, 2025, driven by central bank asset purchases, geopolitical instability and changing monetary policy.
As in the previous 3 years, gold prices have risen steadily over the past 12 months, breaking multiple records as economic and geopolitical risks intensify.
Central banks played a key role in the rise in gold prices, buying more than 1,000 tonnes of gold for the third year in a row in 2024.
The People's Bank of China (PBOC) resumed purchases in 2024, adding 15 tonnes to its reserves in November and December. Poland has increased its gold reserves by 20% from its total reserves in a year.
Analysts attribute the trend to dedollarization efforts, especially after Western sanctions against Russia in 2022 led to a fivefold increase in demand from central banks.
Geopolitical tensions further increased the attractiveness of gold. Escalating trade tensions between the US and China, including recent tariffs, have led to a significant price increase in 2025.
Previously the Ukraine/Russia conflict and broader global instability have reinforced gold's role as a defensive asset, with prices rising sharply since early 2022.
Changes in monetary policy also played a role. The Federal Reserve's expected interest rate cut reduced the opportunity cost of holding unprofitable gold.
UBS Global noted that lower interest rates could shift $6 trillion from money market funds into gold-backed ETFs, which currently hold 3,235 tonnes of gold worldwide. Concerns about inflation and rising budget deficits have only added to the momentum. Consumer and institutional demand in Asia has picked up amid policy reforms.
India cut gold import duties from 15% to 6%, while the number of gold ETFs in the Asia-Pacific region has grown from 3 to 128 since 2005, raising more than $23 billion.
China's economic stimulus measures have further boosted retail investment in gold.
Gold's status as a haven asset dates back thousands of years due to its universal recognition, rarity and durability. Ancient civilisations valued it as a reliable means of saving and this tradition has been maintained in the face of modern crises.
Gold's rise in 2025 underscores its dual role as a relic of historical confidence and a contemporary barometer of global instability. While forecasts are subject to shifting policies and demand, the metal's resilience suggests its legacy will endure.
At a time when investors are experiencing an era of de-dollarisation and financial uncertainty, interest in gold remains linked not only to market dynamics but also to humanity's constant quest for security in an unpredictable world.
Despite optimistic forecasts, some analysts warn the risks of a price decline due to a possible increase in metal supply. Business Insider reports that the gold price could fall by 38-40% if metal production and scrap recycling volumes increase.
With a high gold price, previously unprofitable deposits become profitable again and production can increase rapidly.
It is impossible to accelerate the mining of bitcoins. And in the last 12 calendar months Bitcoins and gold have grown almost equally. At the same time, the volatility of gold is much lower than that of the first cryptocurrency.