Gold hit a historic peak on Monday, with futures advancing 2% to approximately $3,780 an ounce, marking their highest level ever as the precious metal continues an extraordinary rally that analysts expect to persist. The bullion was up 40% this year.
Deutsche Bank, in a note issued on Monday, projected that prices could surpass $4,000 by the close of 2025, signaling a potential annual return of more than 50%.
The rally has been underpinned by several converging factors: robust demand from central banks, a weakening dollar, the tariff policies of President Donald Trump, and ongoing interest rate dynamics, all expected to keep gold prices buoyant in the foreseeable future.
Geopolitical strife in both Europe and the Middle East, coupled with ongoing frictions between the U.S. and China, have prompted central banks worldwide to bolster their gold holdings this year.
The World Gold Council’s 2025 Central Bank Gold Reserves Survey reveals that 95% of central bankers foresee an increase in global gold reserves over the year, while a record 43% anticipate their own institutions will raise their gold stockpile. Notably, none of the surveyed bankers predicted a decline in reserves, even as prices notched new records.
Central banks cited geopolitical risk as a primary motivation for expanding their gold reserves. According to the survey, 85% of respondents indicated that gold’s performance during crises was a significant factor, while 71% referenced its function as a shield against geopolitical uncertainty.
Diversification away from the U.S. dollar also remains a potent driver of gold purchases. Almost 75% of those polled expect the greenback’s share of worldwide reserves to shrink in the coming year, with increased allocations to gold and other currencies, including the euro and Chinese yuan.
