Gold prices continue to hit record highs as rising geopolitical risks fuel safe-haven demand. The price of gold has topped $4,500 an ounce for the first time, with the precious metal up about 71% year-to-date.
Gold started 2025 at $2,620 an ounce, weighed down by geopolitical developments, U.S. government tariffs and global political uncertainty. When the threat of a U.S. government shutdown was added, the gold price rally took a further boost. This rise was fueled by economic data suggesting that the Federal Reserve (Fed) may cut interest rates further in 2026, which also boosted demand for the metal.
Thus, on December 23, 2025, the price of gold exceeded the $4,500 mark for the first time, breaking the previous record and reaching $4,525. Since the beginning of the year, the price of gold has increased by 71%, or $1,880, while the price of silver, which follows the trend of gold, has increased by 137%, surpassing gold.
The two precious metals are favored by increasing political uncertainty, which is amplified by tensions between the US and Venezuela, the ongoing Russia-Ukraine conflict and uncertainty surrounding peace negotiations in Ukraine.
At the same time, silver prices are rising, mainly due to strong demand from industries that benefit from new technologies, such as solar energy, electric mobility and artificial intelligence.
Demand for silver is also growing rapidly due to a shortage in China, which has caused severe shortages in the global market.
Central Bank Support
Demand for gold continues to be fueled by geopolitical uncertainty. Escalating conflicts between the US and Venezuela, Russia and Ukraine, as well as the latest tensions between Iran and Israel, keep safe haven demand strong.
The US economy, with uncertainty surrounding the Federal Reserve’s policy and new interest rate cut announcements, is further boosting the rise in gold prices.
The latest US employment and inflation data have raised the possibility of further interest rate cuts, which is also affecting the price of gold and other precious metals. It is noteworthy that this year’s rise in gold prices has also been fueled by central bank policy, which, due to increasing global risks, has continued to strengthen their gold reserves.
Russia’s central bank, for example, used gold to offset sanctions and ensure its financial stability.
Demand Increase
Trust Economics analysis notes that macroeconomic trends, such as rising geopolitical tensions and market uncertainty, are expected to continue to support gold prices in 2026. Thanos Chonthrogiannis, Chief Economist at Trust Economics, points out that gold’s rise is supported by central bank purchases and strategic portfolio diversification of investors.
The forecast for 2026 is that gold prices will continue to break records, with the global economy remaining uncertain and geopolitical tensions remaining high. Thanos Chonthrogiannis estimates that any downward movement in gold prices will be limited by strong demand, as investors remain focused on the safety offered by the metal.
The Impact of Strategic Reserves
Rising demand for gold and silver, especially from institutional investors and central banks, is supporting prices. The continued rise in interest rates and uncertainty about the dollar have led investors to review their strategies and turn to precious metals.
With growing geopolitical uncertainty and major changes in the financial market, demand for gold and silver is expected to remain strong, and investors expect the prices of these metals to continue to rise, positively affecting the precious metals market in 2026.
The Gold Rush of the 1970s
The gold market of the 1970s remains the most dramatic example of gold’s power during periods of currency instability.
Gold began that decade at $35 an ounce — a stable price that had held since 1934. When President Nixon broke the dollar’s link to gold in 1971, the floodgates opened for the price to explode. By January 1980, gold had reached $850, a staggering 2,300% increase in less than a decade.
But here’s something many investors forget: gold broke its previous all-time high relatively early in that cycle. It then spent years consolidating and rising again, before the final explosive rally.
The factors driving the rise were clear:
- double-digit inflation,
- widening budget deficits,
- geopolitical shocks (oil embargoes, Cold War), and a crisis of confidence in currency values.
Sound familiar? Today’s macroeconomic environment shares more similarities with the 1970s than most investors realize.
The 2001-2011 Gold Boom
The next big gold rally began in 2001, after two decades of bear market conditions. This rally was of a different nature — it was more consistent, longer, and driven by a new set of concerns.
Gold sank to near $250 in 1999 and began to rise after the dot-com bubble. By 2006, it had reached new highs of $725. Many investors at the time assumed that the rally was overdone.
And they were wrong. Over the next five years, gold tripled from those “all-time highs,” eventually reaching nearly $1,900 in September 2011. The 2008 financial crisis, unprecedented monetary expansion through quantitative easing, debt concerns in Europe, and the ongoing fear that central banks were devaluing their currencies.
Once again, the rally didn’t stop because prices looked overdone — it stopped when these fundamentals began to weaken after 2011.
What really ends a gold rally?
Gold rallies don’t end just because prices look high. They end when the underlying factors reverse — and right now, those forces are accelerating, not receding. The fundamental factors supporting gold today include:
- Rising government debt in advanced economies
- Persistent inflation that is squeezing purchasing power
- Currency depreciation through expansionary monetary policy
- Rising geopolitical instability that is boosting safe-haven demand.
Until these trends change, the macroeconomic environment remains positive for gold. And none of these factors appear to be reversing anytime soon. Given its duration, today’s rally looks more recent than previous gold markets.
If this cycle follows historical patterns, the risk of not owning enough gold may be greater than the risk of holding a core position.
