The price of gold continues to record historic highs as rising geopolitical risks strengthen the demand for safe havens. For the first time, the price of gold surpassed the $4,500 per ounce threshold, with the precious metal recording an increase of approximately 71% since the beginning of the year. Gold started 2025 with a price of $2,620 per ounce, influenced by geopolitical developments, U.S. government tariffs, and global political uncertainty.
When the threat of a U.S. government shutdown was added, the surge in the price of gold gained even greater momentum. This rally was bolstered by economic data indicating that the Federal Reserve (Fed) may proceed with further interest rate cuts in 2026, which also boosted demand for the metal. Thus, on December 23, 2025, the price of gold crossed the $4,500 mark for the first time, breaking the previous record and reaching $4,525. Since the start of the year, gold has seen an increase of 71%, or $1,880, while the price of silver, which follows gold's trend, has seen a 137% increase, outperforming gold.
The two precious metals are favored by growing political uncertainty, fueled by tensions between the U.S. and Venezuela, the ongoing Russia-Ukraine conflict, and uncertainty surrounding peace negotiations in Ukraine. Simultaneously, silver prices are rising primarily due to strong demand from industries benefiting from new technologies, such as solar energy, electric vehicles, and artificial intelligence. Rapidly increasing demand for silver is also tied to a shortage in China, which has caused severe deficits in the global market.
Support from central banks
Demand for gold continues to be reinforced by geopolitical uncertainty. OANDA analyst Zain Vawda notes that escalating conflicts between the U.S. and Venezuela, Russia and Ukraine, as well as the latest tensions between Iran and Israel, keep the demand for safe havens strong. The American economy, with uncertainty surrounding Federal Reserve policy and new announcements regarding interest rate cuts, further bolsters the rise in gold prices.
As Vawda points out, the latest employment and inflation data in the U.S. have increased the probability of further rate reductions, which also impacts the price of gold and other precious metals. It is noteworthy that this year’s gold price surge has also been fueled by the policy of central banks, which, due to increasing global risks, continued to strengthen their gold reserves. The Central Bank of Russia, for example, used gold to offset sanctions and ensure its financial stability.
Increasing demand
Analysts at ING note that macroeconomic trends, such as rising geopolitical tensions and market uncertainty, are expected to continue boosting the price of gold in 2026. Warren Patterson, head of commodities strategy at ING, emphasizes that gold's rise is supported by central bank purchases and the strategic diversification of investor portfolios.
The forecast for 2026 is that gold prices will continue to break records, as the global economy remains uncertain and geopolitical tensions stay high. Patterson estimates that any downward movement in the price of gold will be limited by strong demand, as investors will remain focused on the security offered by the metal.
The impact of strategic reserves
Adrian Ash, chief analyst at BullionVault, emphasizes that the growing demand for gold and silver, especially from institutional investors and central banks, is driving prices higher. The continuous increase in interest rates and insecurity regarding the dollar have led investors to revise their strategies and turn toward precious metals.
With the growth of geopolitical uncertainty and major changes in the financial market, demand for gold and silver is expected to remain strong. Investors anticipate that the prices of these metals will continue to rise, positively affecting the precious metals market in 2026.
The golden surge of the 1970s
The gold market of the 1970s remains the most dramatic example of gold's dynamics during periods of monetary instability. Gold started that decade at $35 per ounce—a fixed price maintained since 1934. When President Nixon severed the dollar’s link to gold in 1971, the doors opened for a price explosion.
By January 1980, gold had reached $850, marking a stunning 2,300% increase in less than a decade. But here is something many investors forget: gold surpassed its previous historic high relatively early in that cycle. It then spent years consolidating and rising again before the final explosive surge.
The factors that led to the increase were clear: double-digit inflation, widening fiscal deficits, geopolitical shocks (oil embargo, Cold War), and a crisis of confidence in monetary values. Does this sound familiar? Today's macroeconomic environment shares more similarities with the 70s than most investors realize.
The gold rally 2001-2011
The next major rise in gold began in 2001, after two decades of bear market conditions. This surge had a different character—it was more steady, longer, and driven by a new set of concerns. Gold sank near $250 in 1999 and began to rise after the dot-com bubble. By 2006, it had reached new highs at $725. Many investors at the time assumed the rise was excessive. And they were wrong. Over the next five years, gold tripled from those "historic 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 constant fear that central banks were devaluing their currencies were the drivers. Once again, the rally did not stop because prices looked excessive—it stopped when these fundamental factors began to recede after 2011.
What truly ends a gold rally
Gold rallies do not end simply because prices seem high. They terminate when the underlying factors reverse—and currently, these forces are accelerating, not receding. The fundamental factors supporting gold today include:
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Rising sovereign debt in developed economies
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Persistent inflation that pressures purchasing power
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Currency devaluation through expansive monetary policy
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Increasing geopolitical instability that boosts demand for safe havens Until these trends change, the macroeconomic environment remains positive for gold. And none of these factors show signs of reversing soon. Based on its duration, today's surge appears younger compared to previous bull markets in gold. If this cycle follows historical patterns, the risk of not having enough gold may be greater than the risk of holding a core position.
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