Following a standout year in 2024, the gold price continues to glitter as the yellow metal reaches new highs. The price of gold passed $3,000 for the first time in mid-March and it has since pushed on to nearly $3,500.
The rush to invest in gold that sent the gold price soaring during 2024 has continued during the opening months of 2025, with gold posting successive new milestones.
As geopolitical turbulence and international trade uncertainty grow, gold prices have maintained their upward trajectory, peaking at $3,499.92 on 22 April.
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These levels are “around twice the level [gold] traded at as recently as 2022,” says Tom Stevenson, investment director at Fidelity International. “Gold is seen as a safe haven during times of geo-political and financial uncertainty and attracts buyers when the outlook is unclear, despite its lack of income.”
With gold prices continuing their strong run in the wake of increasing geopolitical tension, investors will inevitably start to wonder if the gold surge can carry prices up towards the $4,000 level.
“It’s difficult to know exactly what might trigger gold to break through the $4,000 mark,” Stevenson tells MoneyWeek. “However, with momentum on its side it can leap to levels that might have previously seemed outlandish not long before.
“Looking back at history, we can see how it rose 6-fold in the late 1970s and again after the financial crisis, and how it’s so far trebled since 2016.”
With bars of gold bullion typically weighing about 400 troy ounces, the current gold price means that each bar is now worth almost $1.4 million.
Turbulence in global economies and stock markets, driven in particular by fears of Donald Trump’s tariff regime, have driven the gold price to its most recent highs.
“Gold is considered a safe haven and loves uncertainty,” Stephen Mullowney, CEO and director at TRX Gold Corporation, tells MoneyWeek. “The world is changing and long-standing norms from an international perspective are at risk.”
Central banks have also been buying up gold, especially in countries like Russia and China, which has helped inflate the price. Meanwhile, the metal is increasingly being used in other industries like nanotechnology and artificial intelligence (AI), as well as in cancer therapy and to fight malaria.
We take a closer look at the reasons behind the global gold rush, before delving into whether more rises are on the horizon.
Why is the gold price rising?
During 2024, the gold price rally was driven in large part by falling interest rates, central bank purchases and geopolitical uncertainty. So far, 2025 has continued these trends, and added a large dose of trade uncertainty on top.
“The biggest drivers of the gold price movements so far have been continued geopolitical risk combined with declining yields,” says Mullowney. “Tariff uncertainty has been the icing on the cake which has increased geopolitical risk and recession fears as a result have lowered yields.”
“Gold, which pays no interest, becomes more attractive in a low interest environment,” says Josh Saul, chief executive of The Pure Gold Company.
The Fed’s rate-setting decisions are particularly important in determining the gold price – more important than the decisions made by other policymakers like the Bank of England, for example.
Last year, “Western investors flocked back to gold as central banks started cutting interest rates,” says Juan Carlos Artigas, global head of research at the World Gold Council.
As well as contributing to global trade uncertainty, Trump’s tariffs threaten to increase inflation. Historically, gold has been viewed by investors as a hedge against the impact of inflation, so inflationary fears are acting as a further driver of gold price increases.
“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 up gold against this backdrop. Central bank gold purchases exceeded 1,000 tonnes for the third year in a row in 2024.
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.”
Demand for gold could be driven further by a pilot program in China that allows the country’s insurers to buy gold for the first time. In February, Bloomberg cited Minsheng Securities Co’s estimate that this could add approximately $27 billion worth of new gold demand into the market.
There is also an increase in gold demand from European investors this year.
“There is one key difference between the rally this year and last year: European investors have joined the party,” says Tom Bailey, head of research at HANetf. “Despite the strong performance of gold in 2024, European investors pulled a total of $5.8 billion out of gold-backed exchange-traded commodities (ETCs) over the course of the year.
“This year has seen a dramatic reversal. So far, European investors have poured over $3.2 billion into gold ETCs.”
How have Trump’s tariffs impacted the gold price?
Given gold’s historic role as a safe haven asset during times of uncertainty, it is no surprise that investors have turned to the yellow metal following the ‘Liberation Day’ tariff announcement that threatens to upend global trade.
However, gold prices initially responded negatively, falling 4.8% between 2 April (the ‘Liberation Day’ announcement) and 7 April.
While gold usually gains when stock markets fall, it is “not unusual during a sudden equity market selloff” for gold prices to fall initially, Hamad Hussein, climate and commodities economist at Capital Economics, wrote on 9 April. “Investors often need to sell quality assets to meet margin calls.”
He added: “Indeed, gold prices fell with equities after the Lehman Bankruptcy in 2008 before bouncing back later.”
As Hussein predicted, gold prices have bounced back since that initial decline. Gold prices gained 17.3% over the 15 days following the initial post-Liberation Day dip to hit their latest high on 22 April.
Gold prices have risen since Donald Trump announced sweeping tariffs on US imports on 2 April, dubbed ‘Liberation Day’.
It is also worth noting that the dollar has weakened since the announcement of the new tariff regime. Since gold is priced in US dollars, this will also have contributed to the rise in gold prices since the tariffs were announced.
Will gold prices continue to rise?
It’s always impossible to predict the future with certainty, however there are reasons to think that gold’s rally could continue this year.
“I expect gold to continue to rise at a steady pace in 2025, although it will be important to keep an eye on US deficits and inflation exceptions going forward,” says Mullowney. “For example, Government layoffs in the US may also have a negative impact on economic activity, which may end up driving interest rates lower.”
Streeter, though, cautions against investors placing too much faith in the gold price rally continuing indefinitely.
“Further steps towards a ceasefire in Ukraine could see prices ease off,” she says, though she also acknowledges that a resumption of conflict in the Middle East or increased aggression from China towards Taiwan would add to gold’s appeal.
“Over the very long term, the gold price has matched inflation,” says Streeter. “That puts the long-term expected return close to the return you would get on cash – so well below a return you might expect from equities.
“Investors considering investing in gold should do so as part of a diversified portfolio and they shouldn’t put all their eggs in a golden basket. It’s still important that you invest in other assets like bonds and shares, given that gold offers no return, like dividends or interest.”
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.
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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