For the first time in history, the price of gold has exceeded $3,000 per ounce, reinforcing its status as a safe-haven asset for investors in times of uncertainty. This sharp rise is primarily driven by a combination of geopolitical factors, trade wars, and increased fundamental demand from central banks and institutional investors. However, the question that investors and traders are currently dealing with is whether the growth will continue or there will be a correction.
Why is gold rising?
Gold has surged 11.85% since the beginning of the year, with gold futures contracts closing last week at $2,293.6 per ounce.* The main driver of this growth is the trade war triggered by tariffs imposed by Donald Trump’s administration, which has wiped out $5 trillion from U.S. stock markets in the past three weeks. This has forced investors to seek safe-haven assets, with gold emerging as the most reliable means of capital protection.
According to a Bank of America survey, 52% of global fund managers consider gold the best hedging instrument against the trade war. Additionally, TD Securities analysis suggests that we are currently in the third most significant gold bull market in modern history.
Demand for gold remains strong
Gold has seen increasing demand from central banks in recent years. In 2024, they purchased 1,045 metric tons of gold, marking the third consecutive year where purchases exceeded 1,000 tons. This trend has continued into January 2025, with central banks adding 18 metric tons, while data from the Chinese central bank also showed purchases for the third month in a row.
In addition to central banks, funds and institutional investors remain key buyers of gold. Despite already accumulating significant holdings, they still have room for further purchases, which could support the continuation of the bullish trend.
Geopolitical risks
Historically, gold tends to rise during periods of geopolitical tension and economic instability. The current surge is fueled by concerns over the trade war, inflation, and the potential use of the U.S. dollar as an economic weapon. In such an environment, investors favor assets that are perceived as stable and resistant to market volatility.
What can we expect next?
While gold has already reached record levels, strong demand persists, and additional factors could push prices even higher. If geopolitical tensions escalate and the trade war deepens, we could see a continuation of the bullish trend. Conversely, if financial markets stabilize and stocks recover, a slight correction in gold prices may occur, which would be a natural development after such a strong rally.
Conclusion
Surpassing the $3,000 per ounce threshold is a historic milestone, confirming that gold remains a key asset for investors in uncertain times. Additionally, high demand from central banks, funds, and individual investors suggests that gold will continue to play a crucial role in the global financial system.
* Past performance is no guarantee of future results.
