- Gold hits a record $3,240/oz amid US-China trade tensions and economic uncertainty.
- A weakening US dollar and inflation fears drive global gold demand.
- UBS raises gold forecast to $3,500 as central banks and ETFs increase holdings.
Gold has emerged as the top-performing asset in 2025, surging over 20% and breaking records as global tensions rattle financial markets. A sharp escalation in the US-China trade conflict, combined with a weakening dollar, has driven a flight to safety among investors.
Meanwhile, institutional demand is adding further momentum. Gold ETFs have seen their largest inflows since 2020. Moreover, central banks across Asia and Latin America are actively diversifying reserves away from the US dollar.
Gold’s Golden Moment: What’s Driving the 2025 Bull Run
Geopolitical friction has resurfaced with force, as President Trump’s aggressive tariff hike on Chinese goods to 145% triggered a fierce 125% retaliation from China. This has reignited fears of a prolonged trade war. As a result, investors are moving out of equities and into traditional safe havens like gold.
Simultaneously, the US dollar’s decline has had a compounding effect. As the greenback weakens, commodities priced in dollars — like gold — become more attractive to foreign investors. This is fueling further upward pressure on prices.
Adding to the momentum are inflationary concerns stemming from global fiscal expansion. With rising government spending and volatile commodity markets, investors are hedging against currency devaluation by buying gold in increasing quantities.
Institutional behavior also reflects a shift. Central banks, especially in emerging markets, are rapidly accumulating gold to reduce dependency on dollar reserves. The resulting demand has outpaced supply in key regions. UBS’s raised forecast to $3,500 indicates that this trend may only be in its early stages.
With markets shaken by political and economic uncertainty, gold has reclaimed its position as the go-to asset for long-term stability and protection.
“Gold is a way of going long on fear.” — Warren Buffett
