Is Gold a Safer Asset for 2025? A Look at Why Gold Continues to Break Records

Since the beginning of 2025, the equity market continued its volatility, but gold prices have travelled an embarkable journey in 2025. As they say, Gold doesn’t create wealth—Gold is wealth. This saying has proved true in 2025, where gold made an all-time high on 20 occasions with some brief corrections, which have been small and short-lived. Gold prices saw a nearly 28% rise in 2024, despite the dollar index climbing and strong performance in equity markets.

Gold Reached All-Time High

Gold price commenced 2025 at $2,650 an ounce, and it is currently trading at an all-time high above $3,200 an ounce. Gold prices have witnessed heightened volatility during the year, especially since the introduction of reciprocal tariffs. In addition, Global banks have repeatedly revised their outlook on gold price on a higher side for 2025 as well as for the next 4–5 years.

In 2025, March saw a 10% increase, and April has already delivered a 6% gain. US President Trump has declared a 90-day pause on reciprocal tariffs while significantly increasing duties on Chinese imports to an eye-popping 125%. This bold move has fueled concerns of an all-out trade war, with far-reaching consequences, as the world’s 2 largest economies intensify their economic conflict.

Why Gold is Likely to Rise in the Remaining 2025?

Here are key reasons why you should consider gold as an investment for 2025 and the years ahead:

• Trade Tariffs: Due to the ongoing tariffs imposed by US President Donald Trump, global markets are facing significant uncertainty. Over the next 90 days and beyond, any developments are likely to keep gold as an attractive safe-haven asset. In addition, US-China retaliations are increasing demand for gold in the short term.

• Central Bank Buying: For over the decades, Central banks have been steady buyers of gold accumulating over 1,000 tonnes annually in the last 3 years alone. China reported strong gold purchases for the 5th month in a row in March 2025.

• Stagflation Concerns: Recent US Federal Reserve policy minutes highlight concerns that the US economy could face stagflation—rising inflation coupled with stagnant growth. Gold tends to perform well in such economic conditions.

• China ETF Inflows: Chinese gold ETFs saw unprecedented inflows of $1 billion, with buying continuing into 2025. Since 2024, global ETF inflows have been on the rise and are expected to remain robust.

• US Fed Rate Cut Expectations: The US Federal Reserve is anticipated to lower interest rates two more times in 2025, further bolstering the positive outlook for gold.

• Stable Performance: Between 2000 and 2025, gold has experienced only two years of significant negative returns, highlighting its consistent track record.

• Geopolitical Uncertainty: Ongoing geopolitical risks—such as the Russia-Ukraine conflict, the breakdown of the Israel-Hamas ceasefire, and rising global political instability—are driving heightened demand for gold.

• Currency Movements: The dollar index has dropped to three-year lows, suffering substantial losses against the CHF, JPY, and Euro, making gold more affordable in those currencies.

• Rising Debt Levels: The US national debt reached a historic $36 trillion in November 2024, raising concerns about debt management. This, along with increasing global debt, makes gold a reliable hedge during periods of economic uncertainty.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.