Gold futures traded in New York have climbed nearly 71% this year, marking their best yearly advance in 46 years. The last time gold had such a strong year was when Jimmy Carter was president, the Middle East faced a crisis, inflation was soaring, and the United States was in the throes of an energy crunch.
Today, tariffs are distorting global commerce, conflict rages over Russia’s war in Ukraine, clashes occur between Israel and Iran, and the U.S. is seizing oil tankers off the coast of Venezuela. During times of instability, investors turn to safe havens like gold.
Gold is viewed as an enduring asset, and investors anticipate the yellow metal will retain its worth during turmoil should inflation spike or currencies decline.
“Uncertainty remains a defining characteristic of the global economy,” remarked Joe Cavatoni, a senior market strategist at the World Gold Council. “In this environment, gold is becoming increasingly appealing as a strategic diversifier and a source of steadiness.”
A drawback for some investors is that gold yields no income like bonds. But when the Federal Reserve lowers interest rates, as it has in recent months, bond yields typically fall, making gold look more appealing.
Gold futures were trading around $2,640 per troy ounce at the beginning of this year. The yellow metal surpassed the record high of $4,500 per troy ounce on Monday. Analysts at JPMorgan Chase predict prices will climb above $5,000 per troy ounce in 2026.
Gold’s 71% surge this year significantly outpaced the S&P 500 index, which advanced by only 18%. In 2024, gold futures escalated by 27%, while the S&P index rose by 24%.
Expectations of some Fed rate reductions in 2026 are supporting gold’s price ascent. A weaker U.S. dollar is also fueling the price hike, making it comparatively more affordable for international buyers to acquire gold.
Gold jewelers and owners of gold adornments benefit from the elevated prices. And the gold rush isn’t solely fueled by Americans purchasing gold bars at Costco—it’s nations acquiring gold by the ton.
Central Banks and Geopolitics
The ascent of gold has been bolstered by central banks themselves purchasing more gold, led by China.
A primary reason China’s central bank is increasing its gold reserves is to lessen reliance on American assets such as U.S. Treasury bonds and the dollar, according to Ulf Lindahl, CEO of Currency Research Associates.
This shift became noticeable following Russia’s invasion of Ukraine in 2022. Western governments began freezing Russian assets denominated in U.S. dollars, prompting the governments of Russia—and also China—to seek ways to reduce the influence of American policy decisions, noted Lindahl.
Central banks worldwide have accumulated over 1,000 tons of gold in the last three years, compared to an average of 400 to 500 tons annually over the preceding decade, data from the World Gold Council indicates.
Precious Metals Shine in 2025
Gold’s surge has been followed by other precious metals, such as silver, platinum, and palladium.
Silver futures have jumped 146% this year, platinum futures are up almost 150%, and palladium futures have increased by 100%.
For investors, precious metals serve as a “hedge against an increasingly uncertain world,” stated Hakan Kaya, a portfolio manager with Neuberger Berman.
This trend may persist. Lindahl of Currency Research Associates said he anticipates gold will keep climbing in 2026. With central banks increasing their gold reserves, the quantity of available gold bullion in the market might diminish. Increased demand from consistent investors coupled with shrinking accessible supply could drive prices upward.
Also contributing to the heightened demand for precious metals are worries about massive government deficits and debt obligations, according to Matt Maley, Chief Market Strategist at Miller Tabak + Co.
“As investors became more conscious of these issues, they began viewing gold as a safe sanctuary,” Maley remarked.
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