Gold’s momentum has price predictions heading upwards of US$4,000 per ounce by the year’s end.
Rising by more than 44 percent since the start of the year, in 2025 the price of gold has hit highs once unthinkable. Aggressive central bank buying, US Federal Reserve rate decisions, ongoing geopolitical conflicts and US trade policy uncertainty have weakened the US dollar and escalated federal debt concerns. The resulting increase in demand for safe-haven assets is pushing investors toward gold, from physical bars to gold exchange-traded funds.
This week, the US government shutdown drove the price of gold even higher, approaching the US$3,900 level as it reached US$3,896.30 early in the morning of Wednesday (October 1) before pulling back.
Let’s take a look at what’s driving the gold price in the final stretch of 2025.
US monetary policy and dollar weakness
Several of the gold market experts the Investing News Network (INN) has spoken to in recent weeks have attributed much of gold’s upward momentum to US monetary policy and the weakening US dollar.
Gold traditionally has had an inverse relationship to the US dollar, and has benefited greatly this year as the dollar has weakened. Many agree that this trend is set to continue feeding the gold price in the months ahead.
“I think the main thing that’s driving gold … is this alternative to the dollar,” Will Rhind, CEO of GraniteShares, told INN in mid-September. He added that gold is even becoming a safe-haven alternative to stocks and bonds in today’s climate of increasing government debt and elevated inflation.
While China has been the focal point of gold buying this year, Joe Cavatoni, senior market strategist, Americas, at the World Gold Council, said western investors looking for risk diversification in their portfolio are helping to drive the latest surge in the gold price. In his view, the Fed has how begun signaling to investors that economic deterioration — and a possible move into a stagflationary environment — is imminent.
“At the heart of all of this is a question around the role of the dollar, the role of dollar-based assets and diversification in portfolios. And that’s where people are looking at alternatives. Alternatives that can give you safe-haven characteristics like gold,” Cavatoni explained in a mid-September INN interview.
Global conflict stoking central bank buying
Strong central bank buying is another key catalyst for gold’s record price streak.
Although the rate at which the world’s central banks are scooping up the precious metal has slowed somewhat in 2025 compared to the last few years, governments are still set to be net buyers this year.
For a fourth year in a row, Cavatoni sees central banks continuing to buy gold despite higher prices, although he noted that they may make price-sensitive adjustments to buy more strategically. According to the World Gold Council’s latest annual central bank survey, conducted in June, 95 percent of the 73 respondents expect to increase their gold holdings over the next 12 months. At the same time, 73 percent expect to lighten their US dollar reserves.
Clem Chambers, CEO of aNewFN.com, told INN that in his view, “governments keep gold because it’s the currency of war.” Essentially, governments sell down their gold in times of peace and refill their coffers as tensions rise — that’s because the yellow metal is considered a strategic reserve, much in the same way as oil.
Countries are building up their strategic reserves of gold as security. Just look at the top two buyers of gold recently: China and Poland. Both are at the center of rapidly escalating geopolitical conflicts.
China has responded to escalating US trade tensions by taking a defensive stance economically, and that has included significantly boosting its gold reserves by 36 metric tons over nine months as of this past July.
Poland is the largest net purchaser of gold this year at 67 metric tons. No doubt, the European nation views the metal as a critical safeguard against the escalating hostilities with neighboring Russia.
“Everybody has to build up their gold reserves, because the road that all these countries are on is the road of increasing global stress,” explained Chambers, adding that global leaders understand that “paper is no good when you’re fighting a war.” This is driving the gold price higher as demand comes up against supply.
“There’s only 3,200 tonnes of it mined every year,” he said, “and the price is only going to go one way.”
Is gold heading to US$4,000 in 2025?
While many of the gold market watchers INN has spoken with in recent weeks are not big on price predictions, US$4,000 is a number that is clearly on the table at this point.
However, both Gareth Soloway of VerifiedInvesting.com, and Steve Barton of In It To Win It said gold is likely to trade sideways and even pull back to as low as US$3,500 before making another go at the US$4,000 target.
So will it get there this year?
Nothing is for certain, but there are a few signals gold investors should watch. The World Gold Council’s Cavatoni said he’s keeping a close eye on what the money markets are doing as interest rates start to move, as well as investor sentiment in western markets, the US in particular.
“Pay attention to how people are responding to that risk and uncertainty that we talked to, and economic conditions that are getting clearer, and I think you’ll find that this case for gold is well supporting the price predictions you’re hearing from analysts in the markets,” he suggested.
Don’t forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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