Gold Prices Soar to Historic Heights: What’s Driving the Precious Metal’s Rally in 2025?

Record-Breaking Performance

Gold has reached a new milestone, trading at $3,652.76 per ounce as of September 9, 2025, marking a significant 45.03% increase compared to the previous year. The precious metal has demonstrated remarkable strength with a 9.27% gain over the past month alone.

Key Drivers of Growth

The current rally in gold prices is being fueled by multiple factors, including the spectre of US tariffs, geopolitical uncertainty, stock market volatility, and US dollar weakness. Central bank and investor demand has remained robust, averaging around 710 tonnes per quarter this year, as gold serves as an optimal hedge against the unique combination of stagflation, recession, debasement, and U.S. policy risks facing markets.

Expert Outlook

The longer-term outlook for gold remains bullish, with prices expected to average $3,675 per ounce by the fourth quarter of 2025 and potentially climbing toward $4,000 by mid-2026. The metal enters the second half of 2025 after an exceptionally strong start, up 26%, and analysts suggest it may increase an additional 0-5% in the second half. However, if economic and financial conditions deteriorate, exacerbating stagflationary pressures and geoeconomic tensions, safe haven demand could push gold 10-15% higher from current levels.

Investment Implications

Currently, gold remains a stable asset amid high market volatility, with prices reaching record levels since early 2025, driven by persistent inflation and economic uncertainty. Many experts recommend adding gold to diversify investment holdings. Central bank buying, which is policy-driven, is expected to continue its current trend, with demand in excess of 500 tonnes having a net positive effect on performance throughout 2025.