Gold’s seemingly unstoppable surge has shattered records, recently crossing US$3,000 per troy ounce for the first time. Driven by a perfect storm of economic uncertainty, rising geopolitical tensions, and shifting monetary policy expectations, analysts and wealth professionals are forecasting even more upside, with some predicting US$3,300 per ounce by the end of the second quarter.

Safe haven appeal

Investors are flocking to gold as a trusted hedge against economic turmoil, particularly amid concerns over a potential economic slowdown and unpredictable trade policies emanating from the White House.

The expansion of tariffs is adding to these fears, especially since tariffs can be inflationary, a scenario where gold historically thrives due to its scarcity and perceived stability.

Meanwhile, expectations of US interest rate cuts in 2025 are making gold more attractive compared with interest-bearing assets.

Central banks have also ramped up their gold purchases, further tightening supply and intensifying demand pressure.

“Looking back, one of the biggest factors that has influenced gold’s ascent in recent years has been robust central bank buying,” says Shaokai Fan, the World Gold Council’s head of Asia-Pacific ( ex-China ) and its global head of central banks. “Since 2022, we’ve seen a significant shift in central bank gold acquisition patterns, along with continued repatriation of gold reserves amid a more complex geopolitical environment.

“Central banks have bought over 1,000 tonnes of gold every year since 2022, double the amount they typically acquired in the decade prior. This central bank gold-buying phenomenon is now quite widespread.”

Geopolitical flashpoints

With conflicts escalating across multiple regions, gold’s role as a geopolitical hedge has strengthened further. Nigel Green, CEO of financial advisory and asset management firm deVere Group, highlights these rising risks: “With tariffs expanding, trade policies zigzagging, and concerns over inflation and an economic slowdown intensifying, capital is flooding into gold as a trusted store of value.

“Geopolitical flashpoints also continue to reinforce gold’s appeal. The ongoing conflict in Ukraine, renewed instability in the Middle East and mounting tensions in the South China Sea are creating a risk-laden global landscape. As military conflicts and diplomatic standoffs escalate, investors are increasingly viewing gold as an essential hedge against uncertainty.

“Meanwhile, disruptions in global trade routes, particularly in the Red Sea, are further heightening inflationary risks, adding another layer of urgency to gold’s rapid ascent.”

Still room for gold to run

Adding to gold’s momentum, gold-backed exchange-traded funds have seen a staggering US$16 billion in inflows this year, far surpassing 2024’s total of US$3.4 billion, according to Robin Tsui, State Street Global Advisors’ Asia-Pacific gold strategist.

“So far in 2025, gold is up 15%, outperforming both stocks and bonds,” Tsui notes. “With these strong tailwinds, gold could soon reach US$3,100 and beyond.”

While central bank gold accumulation remains a key driver, some observers argue this trend has been evident for at least two years and does not necessarily indicate a deeper strategic shift. Still, with interest rate cuts on the horizon, persistent geopolitical risks and surging investor demand, gold’s relentless rally may still have room to run.