Twelve Months of Unprecedented Growth
Gold’s ascent began in October 2024, when prices stood at $2,691 per ounce, and has since risen to an all-time high of $4,311.50.
Quarterly data underline the consistency of this rally: prices advanced 19.3 per cent in Q1, 5.1 per cent in Q2, 15.6 per cent in Q3, and 10.5 per cent so far in Q4. In the past three months alone, gold has added nearly 30 per cent, including an 8 per cent rise over the past week.
Drivers Behind the Surge
Geopolitical Tensions Boost Safe-Haven Demand
Persistent conflicts in Eastern Europe and the Middle East, along with renewed trade frictions between the US and China, have spurred investors into traditional safe-haven assets.
When former president Donald Trump threatened a “substantial increase” in tariffs on Chinese imports, gold touched new highs as markets sought shelter from volatility.
Analysts note that in periods of heightened political risk, gold tends to deliver average weekly gains of around 1.6 per cent, while equities typically move lower.
Monetary Easing Fuels the Rally
The US Federal Reserve’s 50-basis-point rate cut in September 2024 marked the beginning of a new monetary easing cycle. Markets now expect further 25-basis-point reductions over the coming months.
Historically, gold performs well during such phases. Following the Fed’s rate cuts in 2007–08, the metal rose 25 per cent, while the 2019 cycle delivered gains of around 18 per cent.
Central Banks Continue to Accumulate Gold
Global central banks have been steady net buyers for 15 consecutive years, according to the World Gold Council. Between 2023 and 2024, they purchased more than 1,000 tonnes the largest two-year accumulation on record.
The National Bank of Poland has been 2025’s most active buyer, while the People’s Bank of China extended its gold purchases for 18 straight months through May 2024.
A recent survey found that 95 per cent of central bankers expect global gold reserves to rise further this year.
The rationale is clear: after the freezing of Russian reserves in 2022, many policymakers concluded that physical gold, unlike foreign exchange assets, carries no counterparty risk.
ETF Inflows Reach Record Highs
Investor interest has been equally strong in exchange-traded funds (ETFs) backed by gold.
Global inflows reached $64 billion through September 2025, with $17.3 billion added in that month alone — a new monthly record.
The United States led inflows with $35 billion going into funds such as SPDR Gold Shares (GLD) during the third quarter, surpassing the annual record set in 2020.
In India, ETF inflows jumped 578 per cent year-on-year to ₹8,363 crore in September, as local gold prices topped ₹1 lakh per 10 grams.
Concerns Over Fiscal Deficits and Currency Debasement
Rising government debt and fiscal imbalances have strengthened gold’s position as a store of value.
US federal debt climbed to $35.3 trillion in September 2024 — equivalent to 123 per cent of GDP — while the US dollar’s share of global reserves declined to 58.4 per cent, down from 71.5 per cent in 2000.
Analysts at HSBC argue that such fiscal strains, coupled with weakening currencies, continue to support long-term demand for gold.
Outlook and Forecasts
Banks and asset managers have revised their forecasts sharply higher.
• HSBC raised its 2025 average price forecast to $3,355 per ounce, and its 2026 forecast to $3,950.
• Bank of America and Société Générale expect gold to reach $5,000 by the end of 2026.
• Goldman Sachs projects $3,675 by Q4 2025, rising to $4,900 by late 2026.
• JPMorgan anticipates a similar trajectory, with CEO Jamie Dimon noting that gold “could easily reach $5,000 to $10,000 in certain environments.”
Technical Picture
Gold’s annualised volatility of 16.7 per cent remains moderate relative to its scale of gains.
The trading range between the November 2024 low ($2,541.50) and the October 2025 high ($4,311.50) represents a 69.6 per cent increase.
Analysts expect prices to consolidate around $4,240 by year-end, with potential short-term peaks of $4,447 in November and $4,368 in December.
Risks to the Bullish Scenario
A sudden reversal in monetary policy remains the most immediate risk.
If the Fed were to pivot back toward a tighter stance, or if a robust global recovery were to dampen safe-haven demand, gold could lose momentum.
Nonetheless, most analysts believe that slower US growth, lower interest rates, and a weaker dollar will continue to underpin prices in the near term.
Conclusion
Gold’s rally is being sustained by a rare confluence of forces — geopolitical tensions, monetary easing, central bank accumulation, record ETF inflows, and mounting fiscal concerns.
At $4,305.60 per ounce, and with forecasts pointing toward $5,000 or higher, the metal has reaffirmed its dual role as both a safe-haven asset and a strategic reserve cornerstone in an increasingly unstable global economy.