Gold Price 2025: Why Did Prices Surge to Record Levels? Will the Bullish Wave Continue?

Since the beginning of this year, gold has become the undisputed star of the financial markets. It has achieved an exceptional performance that we perhaps haven’t seen in decades, with a 47% increase since the start of 2025, clearly outperforming most global financial assets. But what is driving investors to flock to this precious metal with such greed? And the most important question: will this crazy rally continue or are we on the verge of a major correction?

Why Gold Now? The Main Factors Behind the Record High

Trade wars and tariffs: the trap of protectionist policies

The crisis began with the imposition of hefty tariffs on imported goods in early 2025. This policy sparked a wave of concern among investors about the future of the global economy. When the market feels that the economy may enter a period of instability, individuals and institutions seek a safe haven. Gold has long been the first choice to protect wealth from economic shocks and weak currencies.

Falling interest rates: a gift to the precious metal

On September 17, the U.S. Federal Reserve decided to cut the interest rate from 4.5% to 4.25%. This cut was a real turning point in the market. When interest rates fall, gold (which does not generate interest) becomes more attractive compared to bonds and bank deposits. The result? The price jumped by about 22.9% during September alone.

Persistent global inflation: the silent threat

IMF forecasts indicate that global inflation rates will remain around 4.2% in 2025, levels high compared to the historical average of 2-3%. This means the value of fiat currencies is eroding rapidly, making gold—the one that does not lose its value over time—a logical investment choice.

Geopolitical crises: ongoing tension on the horizon

Escalation between Israel and Iran in June, specifically strikes on oil facilities, raised real fears about maritime navigation and the Strait of Hormuz. Any disruption in oil supplies would have a catastrophic impact on the global economy. Additionally, the ongoing Russian-Ukrainian conflict and tensions between the US and China add layers of uncertainty that make gold the only safe haven.

US government shutdown: financial and political chaos

When the US Congress failed to agree on continuing funding on September 30, a partial government shutdown began. This shutdown could affect the release of US economic data and increase the fog around the economy. When investors don’t know what will happen, they turn to gold.

Numbers Speak: The True Demand for Gold

According to World Gold Council reports, the price of gold has risen by about 26% in the first half of 2025 alone. But the most striking figure is trading volume: trading volumes reached a record level of $329 billion daily.

More importantly, the source of this demand:

• Gold ETFs: holdings increased by 41% to reach $383 billion
• Central banks: continued buying gold steadily to strengthen their reserves
• Individual and institutional investors: seeking protection from inflation and potential crises

This strong demand is not speculative—it’s genuine investment by real market players.

Technical Data: What Does the Chart Say?

Looking at the daily chart, we see that gold has broken through strong resistance levels such as $3700 and $3800. However, in the past three days, the price faced solid resistance at $4050.

From a technical perspective, the MACD indicator shows positive signals but gradually weakening. The Bollinger Bands indicate that the price may be in an (overbought) zone, which could precede a potential correction.

Critical levels:

• First resistance: $4050
• First support: $3900
• Strong support: $3819
• Fundamental support: $3700 (a break below this would signal a deeper correction)

Outlook: Three Scenarios for the Coming Months

Scenario One: Relative Stability (least likely)

If economic and geopolitical conditions remain relatively stable, and the Fed cuts rates by 25 basis points in October and December, gold may move sideways between $3500 and $3600, achieving an annual return of around 34%.

Scenario Two: Correction and Rebound (more likely)

This scenario expects:

• October: technical correction toward $3820-3900
• November: stabilization and momentum buildup around $3900-4100
• December: resumption of upward trend toward $4100-4200

This scenario assumes no major economic crisis or large-scale military confrontation.

Scenario Three: Ignition (least expected but most radical)

If stagflation occurs (slow growth + high inflation), or a large military conflict erupts in the Middle East, gold could break the $4000 level to reach $4400 by year-end, with returns potentially exceeding 60%.

How to Benefit from Gold Movements?

For Long-term Investors

The goal here is to protect wealth from inflation and instability. Strategies include:

• Buying physical gold and holding it for a year or more
• Investing in gold ETFs
• Purchasing shares of mining companies

Central banks and major institutions follow this approach successfully.

( For Short-term Traders

This requires daily monitoring and familiarity with technical and fundamental analysis tools. Entry and exit points should be based on the levels mentioned above.

Important note: Short-term trading in gold involves very high risks, especially during turbulent periods like now. Caution and proper portfolio management are essential.

Final Investment Tip

Investment experts agree that the gold allocation in an investment portfolio should not be less than 15-20% of the total value. This ensures sufficient protection against sudden shocks without sacrificing full returns.

Summary

The current gold price reflects a state of economic and geopolitical uncertainty worldwide. The most realistic forecasts suggest that gold may end 2025 around $4100, with a strong likelihood of a technical correction in the coming weeks. The key is a deep understanding of economic and political factors and the ability to adapt quickly to developments.