Gold's Historic Rise: What Does the Market Expect?

In 2024-2025, gold has experienced one of the most spectacular rises in its modern history. From approximately $2,050 USD/oz at the beginning of 2024, the precious metal climbed to surpass $4,300 USD/oz in 2025, marking an increase of more than 100% in less than two years.

Notable milestones:

• March 2024: First break of the $2,200 USD/oz barrier

• October 2024: Breaking the $3,000 USD/oz barrier

• September 2025: All-time high surpassing $4,300 USD/oz

To put these figures in perspective: in 2020, during the early months of the pandemic, gold reached approximately $2,070 USD/oz, a record at that time. The current price represents an additional 100%+ increase over that previous all-time high.

1. Massive Central Bank Purchases

Global central banks, led by China, India, Poland, and Turkey, have been accumulating gold at rates not seen since the 1960s. In 2024, central banks bought more than 1,100 tons of gold, and the trend has remained solid in 2025.

This strategy responds to several factors: reserve diversification away from the US dollar, inflation protection, and search for assets without counterparty risk in an uncertain geopolitical context.

2. Persistent Geopolitical Tensions

Conflicts in Eastern Europe and the Middle East have generated structural demand for safe-haven assets. Historically, gold shines brightest during periods of political uncertainty, and 2025 has been no exception.

3. Interest Rate Cuts

The US Federal Reserve and other major central banks have begun cutting rates during 2025. These rate reductions have been bullish for gold, as lower rates reduce the opportunity cost of holding non-yielding assets and weaken the dollar.

4. US Dollar Weakness

The dollar index (DXY) has shown signs of structural weakening, which typically favors gold. When the dollar loses strength, gold becomes more attractive to international buyers and as a hedge against monetary depreciation.

5. Persistent Structural Inflation

Although inflation has moderated from its 2022 peaks, it remains above central bank targets in many economies. Gold maintains its appeal as protection against erosion of purchasing power.

Institutional Investors:

Investment funds and wealth managers have significantly increased their gold exposure. Physical gold-backed ETFs (such as GLD and IAU) have seen consistent net inflows throughout 2024 and 2025.

Retail Investors:

The general public has rediscovered gold as a savings vehicle. Sales of Bullion coins (Krugerrand, American Eagle, Maple Leaf) have reached record levels in many markets, with premiums over spot value remaining elevated due to strong demand.

Asian Markets:

China and India, the world's two largest gold consumers, have maintained robust demand in both jewelry and investment. The expanding middle class in these countries continues to view gold as a preferred form of savings and wealth preservation.

Projections from major analytical houses for late 2025 and 2026 have been drastically adjusted upwards:

Optimistic Scenario (Goldman Sachs, Bank of America):

They project gold could reach between $4,800 and $5,000 USD/oz in 2026, driven by continued interest rate cuts, persistent dollar weakness, and sustained central bank purchases. This scenario assumes a moderate growth environment without deep recession.

Base Scenario (Market Consensus):

Analyst consensus places gold in a range of $4,200-$4,500 USD/oz by the end of 2025 and early 2026. This scenario contemplates a consolidation of current prices before the next bullish leg up.

Conservative Scenario (JPMorgan, Citigroup):

Some analysts warn of possible technical corrections toward the $3,800-$4,000 USD/oz zone if the US economy shows greater resilience than expected, though this level is now considered strong support.

Key Factors to Monitor:

• Fed and ECB monetary policy decisions

• Evolution of geopolitical tensions

• US dollar strength/weakness

• Physical demand in Asian markets

• Flows into gold ETFs

Although the outlook is generally positive, investors should consider several risks:

Technical Correction Risk:

After a 100%+ rally in less than two years, we may see profit-taking and consolidation. Corrections of 5-10% are normal and healthy in bull markets.

Unexpected Dollar Strength:

If the US economy exceeds expectations and the Fed keeps rates high, the dollar could strengthen, pressuring gold downward.

Resolution of Geopolitical Conflicts:

Significant de-escalation in current conflicts could reduce safe-haven asset demand, though this scenario seems unlikely in the short term.

Changes in Central Bank Policy:

If central banks reduce their pace of gold purchases, it could eliminate an important pillar of current demand.

For investors considering gold exposure in the current context:

Strategic Diversification:

Experts recommend maintaining between 5-15% of portfolio in gold and precious metals as a hedge. This range can be adjusted according to individual risk profile.

Staggered Purchases (Dollar-Cost Averaging):

Instead of making a single entry, consider buying in tranches over several months. This strategy reduces the impact of short-term volatility.

Prefer Physical Bullion Gold:

For long-term investment, Bullion coins (Krugerrand, Eagle, Maple Leaf) and bars offer the best value-liquidity ratio, with moderate commercial premiums of 4-9% over spot.

Consider ETFs for Flexibility:

For investors seeking immediate liquidity and not wanting to manage physical gold, physical gold-backed ETFs are a valid alternative.

Maintain Long-Term Perspective:

Gold is an asset to preserve wealth across decades, not a vehicle for short-term speculation. Monthly volatility should be viewed in the context of the long-term trend.

Gold's historic rise in 2024-2025 is not an isolated phenomenon, but the result of multiple structural factors that remain in place: reconfiguration of the global monetary order, search for protection against persistent inflation, and diversification in the face of geopolitical risks.

While it is impossible to predict short-term movements with certainty, consensus points to gold maintaining a solid investment case for late 2025 and 2026. Structural fundamentals —especially central bank purchases and the ongoing rate cut cycle— support a scenario of sustained elevated prices.

For investors, the current moment offers an opportunity to participate in what could be the beginning of a bullish super-cycle in precious metals. However, the key lies in maintaining realistic expectations, diversifying adequately, and adopting a long-term vision.

Gold has demonstrated for millennia its capacity to preserve wealth through crises, inflations, and regime changes. The question is not so much whether gold will continue to be valuable, but what its price will be in an increasingly uncertain world.