The price of gold increased 25% in 2025 through to 8 July, with global instability causing gold prices to increase as investors flock towards the safe-haven metal.
Over the past six months, the price of gold has risen 26% – 41% over the past year – peaking at over $3,500 along the way. The drivers for the gold price rally were multifaceted, but one of the most important, especially in recent months, has been increased uncertainty over the global economy in the run-up to and wake of Donald Trump’s ‘Liberation Day’ tariffs.
That drove a global rush to invest in gold. Gold prices surged, gaining 18.5% between 3 March and 6 May. Over the same period, the S&P 500 index fell 4.15% (though at one point during this period, it was down by more than 14%).
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The gold price briefly broke through the $3,500 barrier during April, putting the price of gold at around double the price it traded at during 2022.
“Gold is seen as a safe haven during times of geopolitical and financial uncertainty and attracts buyers when the outlook is unclear, despite its lack of income,” said Tom Stevenson, investment director at Fidelity International.
News of improved US-China trade relations broke on 12 May, including a temporary pause on the triple-figure tariffs both nations were charging each other in the aftermath of Liberation Day. That threatened to derail the rally, with gold prices falling 7.4% between 6 and 14 May. But gold has found its groove again, gaining over 4% in around two months since.
Tariff pause dents gold price surge
Gold’s constant twists and turns so far this year have in general followed the ongoing melodrama that is Trump’s international trade policy.
The periods that have seen the most dramatic gains for gold prices have been those in which Trump’s tariffs seemed most restrictive, while conciliatory periods, most notably the aftermath of the pause announcement, have seen financial markets in general calm and gold prices pull back from their surging highs.
This is especially true during periods of inflation, which many economists think Trump's tariffs could stoke.
“Unlike other currencies whose value can diminish as central banks print more fiat money, gold’s worth remains resilient,” said Rick Kanda, managing director at the Gold Bullion Company.
Gold prices are typically quoted in dollars, so the strength of the world’s reserve currency has a particularly strong influence on gold prices.
As such, there has been a slight pull back in gold prices over recent days, as the US administration has once again appeared to go soft on its tariff policy just as the original end of the tariff pause (9 July) approaches.
“The later timeline raises hopes for trade agreements with key partners, easing trade concerns,” said Nikos Tzabouras, senior market analyst at Tradu.com. The US dollar index has gained around 1% over the past five days on the back of this optimism.
Which factors are pushing the gold price up?
While the latest catalysts that pushed the gold price up (tariffs) have subsided, at least for now, many of the prime movers behind the gold price rally remain.
During 2024, falling interest rates, central bank purchases and geopolitical uncertainty gave gold momentum. So far, 2025 has continued these trends, and despite the temporary pauses on tariffs, there is still a great deal of uncertainty over the long-term outlook for trade and the global economy.
“The biggest drivers of the gold price movements so far have been continued geopolitical risk combined with declining yields,” said Stephen Mullowney, CEO and director at TRX Gold Corporation.
“There are also ongoing concerns that governments across the world have piled up high levels of debt, which is associated with a rise in long-term inflationary expectations,” says Susannah Streeter, head of money and markets at Hargreaves Lansdown.
Central banks are continuing to buy gold against this backdrop. Central bank gold purchases exceeded 1,000 tonnes for the third year in a row in 2024.
Data from the World Gold Council shows that the world’s central banks added a net 20 tonnes of gold to their reserves during May this year, indicating that this key source of gold demand remains steady, if a little below the levels that were seen late last year.
“Gold remains a focus for central banks worldwide,” said Marissa Sali, senior research lead, APAC, at the World Gold Council. She cites the World Gold Council’s recent survey of investment banks that indicates 95% of central bankers expect official gold reserves to increase this year, and that a record 43% expect their own gold reserves to increase over the next 12 months.
Anita Wright, independent financial adviser at Bolton James, notes: “Central banks, particularly in countries like Russia, China, India and Turkey, have dramatically increased their gold purchases, reflecting growing mistrust in the US dollar. This trend is further fuelled by the countries accelerating their efforts towards de-dollarisation.”
How to gain exposure to gold prices
There are three main ways to invest in gold. The first one is investing in the metal itself through a financial contract, such as an exchange-traded product. See our article on the best gold ETFs for more information.
You can also get indirect exposure by investing in the miners that dig gold out of the ground. This can be done by investing directly in their shares, or by buying a gold fund or investment trust. Note that gold miners don’t always rise with the gold price, as other company-specific factors are at play.
Lastly, you can buy physical gold bars or gold coins.
In terms of how much gold to hold in a portfolio, Stevenson suggests around 5-10% is a good amount – which is about the same as you might hold in cash.
“The two offer insurance and dry powder to complement the growth and stability of the shares and bonds that make up the bulk of a balanced portfolio,” he comments.
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