Gold price hit Record 3,000 US dollars: What drives the rally?

Gold prices rose by 13.6% in 2025 and injured $ 3,000 per ounce last week, which represents a new all -time high. Geopolitical tensions and economic uncertainties drive Safe-Haven flows and increase gold prices. However, some other long -term factors and trends will help to determine whether the rally will be maintained.

Causes behind the youngest gold rally

The greatest shift in the gold market in recent years is the increased demand from the global central banks. According to the World Gold Council, the central banks bought over 1,000 tons of gold in 2024, which marked the third year as a result of the considerable purchase and roughly doubles the average annual purchase amount for the previous decade. The purchase of the central bank reserve continued in 2025, led by Uzbekistan, China, Kazakhstan, Poland and India.

The central banks increased their allocation to gold after the seizure of the Russian assets of the Central Bank in 2022 after the invasion of Ukraine. Freezing 300 billion US dollars in the Russian Central Bank -Fiat currency was susceptible to reserves in foreign currencies or foreign institutions. The Russian Central Bank value values ​​were not confiscated because they were recorded in Russia.

This event started a global drive for diversification, with gold performing as a preferred asset due to its independence of political and economic sanctions. In addition to reducing the risk of seizures, the central banks consider gold to be protected against inflation and a way to reduce the dependency on the dependency on-core reserves. In view of the less friendly approach of the Trump management for foreign relationships, the reduction in the central bank is likely to be continued by increasing the allocation to gold.

Political and economic uncertainty increase demand

Geopolitical and economic tensions affect more than the gold appetite of the central banks. They also affect the behavior of the investor. The increasing global level of debt, the renewed fear of recession, the escalating trade tariffs and a global monetary loosening cycle, investors have pushed as a hedge towards gold.

The global gold -TF inflows have so far accelerated significantly in 2025. According to the World Gold Council, physically supported gold -ETFs made 9.4 billion US dollars of 9.4 billion US dollars in February. The largest monthly inflow since March 2022. 2025 and 37.8% last year.

Institutional investors also believe that the gold rally can be continued. In his market and macro view on March 11, Jeffrey Gundlach, CEO from Doubleeline, said it will earn gold on 4,000 US dollars. I am not sure whether this will happen this year, but I think that this is the measure that is expected from the long consolidation of around 1,800 US dollars for gold. ” In addition, Goldman Sachs recently revised its gold forecast over 3,100 US dollars per troy -Used by the end of 2025.

The enthusiasm for gold is exceeded on Gold Miner shares. Vaneck's GDX, the largest gold miner ETF, has risen by 28.8% for a year and exceeds the S&P 500, which has lost 4%. GDX, which includes mines in Newmont and Agnico Eagle as two largest stocks, has increased by 52.5% last year. Miners are used for a gold price, and the increasing spot prices are expected to achieve significant sales and profit growth for the sector this year.

The gold demand could also be increased by new participants. For example, China recently launched a pilot program with which ten large insurance companies can invest up to 1% of its assets in gold for the first time. The program, which was announced on February 7, 2025 by the National Financial Regulatory Administration, could add 27 billion US dollars to request and support gold prices.

Gold price prospects and potential risks

New demand sources and persistent geopolitical stress could trigger additional streams in gold in the next quarters. Despite the upward dynamics, there are some reasons to be careful the trend.

An improvement in global economic outlook, which may be due to a solution to the collective bargaining dispute, could reduce the attractiveness of gold as a safe-have property. When trade voltages and growth indicators increase, investors can turn into defensive assets such as gold and back into growth stocks.

Since the inflation concerns can resume in the United States due to higher potential import prices, the Federal Reserve may not be able to submit the three 0.25% cuts into the Fed Fund market. Higher interest rates would increase the opportunities for holding gold.

The demand for jewelry, which is about 40% of global gold consumption, can decrease due to record prices. India, the second largest country in the world in gold jewelry, goes through a temporary soft spot in economic growth. Any significant decline in buying by Indian consumers could signal a weak basis, which may result in demand from investors and central banks.

The increase in gold allocations last year clearly went well for investors. It is unlikely that the central bank's demand will fade in the current environment, and impulse dealers could pursue the market of over $ 3,000 per ounce. However, at least part of the latest increase is due to Safe-Haven currents that can be temporary. If the Trump administration is correct in its forecast for an improved economic outlook in the second half of 2025, the current growth pressure could settle and triggers a reversal of the mood on the gold market. Until then, the trend is your friend and the trend is still intact.