Following a standout year in 2024, the gold price continues to glitter as the yellow metal reaches new highs. In mid-March, the price of gold has passed $3,000 for the first time.
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.
The price of gold broke the $2,900 per troy ounce barrier for the first time in February, before going on to reach new heights the following month. A turbulent week for international trade and the stock market saw gold break through the $3,000 mark on the morning of 14 March.
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“We have known [the $3,000 milestone] has been coming over the past few months for a multitude of reasons,” says Joseph Cavatoni, senior market strategist, World Gold Council. “With the global challenges and risks that come with managing money today creating heightened concern, all eyes are on how gold continues to play a role as a safe-haven asset.”
Over the past five years, the gold price has increased by more than 88%.
With bars of gold bullion typically weighing about 400 troy ounces, the current gold price means that each bar is now worth more than $1 million.
Turbulence in global economies and stock markets, driven in particular by Donald Trump’s tariff-driven trade war, have driven the gold price to its most recent highs.
“Persistent geopolitical and economic uncertainties, particularly around tariffs, continue to support gold's appeal as a safe-haven asset,” says Tom Bailey, head of research at HANetf.
With so much economic and geopolitical uncertainty around, it’s small wonder many investors believe that now is a good time to invest in gold.
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?
There are three fundamental factors that have driven the gold price rally since 2024: interest rates, central bank purchases, and geopolitical uncertainty.
Interest rates
History suggests the gold price does well when interest rates fall.
This is because central banks typically cut interest rates in an attempt to encourage growth when the economy is stagnating. Stock markets usually struggle in periods like this, so gold can be a good hedge.
“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.
Central bank purchases
Central banks buying up gold is also causing the price to soar, with unprecedented purchases from emerging markets like China and India, as they hedge against global economic fragmentation.
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-dollarization.”
“The importance of gold in foreign reserves is well recognised,” says Artigas, for “the role it plays as a long-term store of value, as a diversifier, its performance in times of crises, and the fact that it does not carry credit risk.”
Central bank gold purchases exceeded 1,000 tonnes for the third year in a row in 2024.
“In 2025, we expect central banks to remain in the driving seat and gold ETF investors to join the fray, especially if we see lower, albeit volatile interest rates,” writes Louise Street, senior markets analyst at the World Gold Council.
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. Bloomberg cites Minsheng Securities Co’s estimate that this could add approximately $27 billion worth of new gold demand into the market.
Geopolitical uncertainty
Interest rates aside, other factors on the global stage are also driving the gold price. The yellow metal is considered a safe-haven asset, so investors often flock to it during periods of conflict in an attempt to escape market shocks.
Trump’s apparent determination to disrupt global trade as much as possible creates a geopolitical landscape that is rife with upside for gold prices.
How has DeepSeek impacted the gold price?
On 27 January the stock market, particularly the Magnificent Seven, experienced a shock when DeepSeek, a Chinese generative AI start-up, announced that it could outperform OpenAI’s ChatGPT having spent less than $6 million on its final training run, and without relying on high-performance GPUs.
Investors fled the big tech stocks, in search of safer places to put their money.
“The gyrations on stock markets, caused by progress made by Chinese AI rival DeepSeek, which has potentially threatened the dominance of Silicon Valley, may also have helped gold’s glittering run upwards this week,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown, as gold neared a new high on 30 January.
The big tech selloff has continued since, and as the stock market has fallen, gold prices have continued to rise.
How are Trump’s tariffs impacting gold prices?
Besides their negative impact on the stock market and the general geopolitical turmoil they are creating, there is one further way in which Trump’s tariffs are moving the price of gold: they are encouraging European investors to join a trend for which they have so far sat on the sidelines.
“There is one key difference between the rally this year and last year: European investors have joined the party,” says Bailey. “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.”
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.
“After a stellar performance in 2024, gold is showing the potential to maintain this momentum in 2025, and we expect further upside from here,” says Bailey.
“With rising inflation expectations, lower rates, and continued uncertainty, we continue to see support for gold looking ahead,” says Cavatoni.
Looking longer term, gold prices could leave the $3,000 threshold in the rear-view mirror. “Once $3,000 has been breached we will then have to re-assess,” says Prem Raja, head of trading floor at Currencies 4 You. “$4000 is a great longer- term target but the first target has to be hit first."
How 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, Tom Stevenson, investment director of personal investing at Fidelity International, suggests that 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.
Streeter cautions that, as with all investments, gold prices can go down as well as up.
While gold has “often risen in times of economic or political crisis”, she says, “it has also a history of losing its lustre. After a strong run in the ‘70s and early ‘80s, it took over 23 years to get back to its 1983 high.
“Given the volatility associated with gold, it usually should only make up a small portion of a diversified investment portfolio.’’
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