As the prevalence of persistent inflation, geopolitical crises, pending interest rate cuts and
looming economic uncertainties continue, gold has once again become a haven for
investors. In 2025 gold bullion hit record highs not seen in decades, leaping to its largest
increase in 45 years. Since January, gold has risen 45%, resulting in a record high of $3,831
per ounce price, with the potential to test the $4,000 level in 2026, if tensions and
uncertainty persist.
As the dollar continues to be bearish (falling nearly 11% since January), the greenback-
priced gold is less expensive for holders of other currencies. Additionally, pressure on the
Federal Reserve to cut interest rates has heightened concern over the Fed’s independence,
fueling further gold purchases.
Historically, gold has been a safe haven for investors, and with the usual drivers of inflation
and geopolitical tensions already triggered, the trade wars of the Trump administration and
his mammoth tax and spend plan have further driven investors to seek the dependability
offered by gold.
The role of gold as a store of value comes, in part, from its scarcity. Total supplies rise by
only an estimated 1.7% per year, meaning “no policy, no discovery, no quantitative easing
of geology can debase gold,” says Stephen Innes, managing partner at SPI Asset
Management. When investors worry that government is losing their grip on public finances,
gold’s attractiveness only increases.
Other precious metals do not carry the same advantage, as huge quantities of them are
used and consumed each year.
Gold has not seen this type of boon since 1979, when it jumped 126%, as Iran’s revolution
ballooned the price of oil, and spurred runaway inflation. Analysts see the recent gold as
having legs and expect it to continue rising. “We see no true alternative to gold as a hedge
against U.S. risks,” said Arnab Das, macro strategist at Invesco. “And expect central banks
to keep buying gold.”
Central banks have continued adding to their gold reserves in recent months, as the
tensions in the middle east and between Russia and NATO countries continue to
exacerbate. In July, China marked the ninth consecutive month of increasing their gold
reserves.
With the effects of Trump’s tariff policy still evolving, and the President’s consistent
badgering of the Federal Bank, investors are left reaching for gold in lieu of the weakening
dollar as well as the risk of interest rate declines lowering the market bonds. And while the
markets have not been badly hit by the jump in U.S. tariffs, the most obvious vehicle for
trade war worry has been the U.S. dollar.
Meanwhile, ordinary folks have been drawn to the lure of gold as well. Bulk buying giant
Costco frequently sells out its available gold bars, as the precious metal draws the
attraction of Doomsday hawkers and IRA holders leery of the volatile market. The
investment though, comes with the added challenge of storage and insurance. Others have
opted to convert their existing IRAs or Roth accounts to gold IRAs, or other precious metals,
as well.
