Gold is on a tear in 2025, with the latest threshold at $4,000 per troy ounce. Year-to-date gains are up 50%, turning gold into one of the best-performing investable assets around.
There are several reasons for this boom: the Fed’s rate cuts, a weakening U.S. dollar, and the FOMO effect of everyone piling in on gold.
And with geopolitical tensions escalating globally, inflation pressures remaining elevated, and monetary policy facing a delicate balancing act, government deficits and sovereign debt burdens are ballooning.
If that scenario sounds familiar to economists, that’s no accident.
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“This isn’t dissimilar to the 1970s, when gold’s spectacular bull run coincided with surging inflation and geopolitical uncertainty,” said Patrick Kennedy, founding partner at AllSource Investments. “Investors flock to gold in these environments precisely because it has no earnings or cash-flow fundamentals that wars, tariffs, or recessions can impair.”
It’s also why most experts think this gold rally is nowhere near over.
With the Federal Reserve cutting its benchmark Federal Funds rate by 0.25% last month, and more cuts expected before the end of the year (according to most economists), implied inflation-based volatility is sending investors to safe-haven assets like gold.
At the same time, the dollar is losing strength, making gold relatively less expensive for overseas investors, thus boosting demand for gold.
Of course, as investors pour cash into gold ETFs, this triggers FOMO and a run by more investors looking to capitalize on gold’s current appeal, the market is experiencing significant demand. Gold ETF inflows are up to $64 billion year-to-date, according to data from the World Gold Council. That’s light years ahead of the past four years, when gold ETF outflows cleared $23 billion.
Trade troubles are also pushing gold prices sky-high.
“There’s uncertainty about tariffs because the Supreme Court may overturn some of them in the first half of next year,” said David Russell, global head of market strategy at TradeStation Group. “Combined with continued widening of the fiscal deficit, conditions may remain favorable for gold. Most of its pullbacks have been limited to 2%-3% in recent weeks, so investors may not see significant retrenchment for a while.”
Combine this with the monetary and geopolitical uncertainty, and you can see why gold is having a big moment – much like it did in the 1970s.
When uncertainty hits, corporate profits and stock valuations get repriced, but gold is insulated from those forces. “It’s also a decentralized asset, universally recognized and accepted as a store of value, which makes it one of the few truly global safe-havens,” Kennedy noted. “That combination; freedom from fundamentals and universal acceptance, is why gold tends to shine brightest when volatility spikes.”
Has The Gold Train Left The Station?
Investors may wonder if, at $4,000 an ounce, the premium is too rich to buy into right now. It’s a fair point, but market experts say there’s still room to run with gold.
“It’s not too late to buy into gold, as many analysts, including JP Morgan, Goldman Sachs, and others, predict that gold may reach $4,900 by 2026,” said Joshua D Glawson, content manager at MoneyMetals.com. “It’s perfectly normal not to be able to afford a full troy ounce of gold, which is why I recommend investing in fractional gold instead of an ounce.”
Fractional gold offers the metal at lower amounts than by the ounce, meaning a lower barrier to entry into the gold market. “Buy 1/10th ounces, 1/4 ounces, or 1/2 ounces if you cannot afford a full troy ounce,” Glawson recommends.
Other market experts agree that it’s not too late to buy gold, but it’s not the early-bird special either.
“Gold tends to thrive when confidence in traditional markets dips, and that cycle isn’t over yet,” said Eugene Edwards, founder at Eugene Financial Services. “The last time gold hit a major psychological milestone, people called it the top, only for it to climb another 30%.”
That said, jumping into gold now should be a strategic, not an emotional play. “Think of gold less like a lottery ticket and more like a long-term insurance policy,” Edwards said. “You hope you never need it, but you’re sure glad you have it when things get messy.”
Edwards usually recommends making gold a 10%-to-15% portfolio staple, depending on age, goals, and risk appetite. “During volatile times like these, gold acts like the ballast of a ship: it keeps you steady while everything else rocks around you.”
Edwards is a big believer in keeping gold investing straightforward and secure. “For most investors, physically backed options like gold IRA provider Augusta Precious Metals stand out because they make it easy to own actual gold and silver rather than just deliver ‘paper promises,'” he said.
Beyond physical bullion, Edwards recommends ETFs like SPDR Gold Shares (NYSE:GLD) or iShares Gold Trust (NYSE:IAU), which offer convenience for those who prefer digital exposure without storage responsibilities. “For investors with a bit more risk tolerance, select mining companies or royalty firms can provide leverage on rising gold prices, though they come with more volatility,” he noted.
Tracking Gold In Bull Markets
Historically, gold’s bull markets have produced outsized returns that far exceeded typical equity returns during those stretches. “For example, during the 1976–1980 cycle, gold gained roughly 700% over four years,” Kennedy said. “We don’t see this cycle being any different.”
Kennedy said his firm isn’t recommending a speculative gold trade; it’s asserting that gold is now a core portfolio position. “For most clients, a 5% allocation makes sense, adjusted based on individual circumstances,” he added.
Editorial content from our expert contributors is intended to be information for the general public and not individualized investment advice. Editors/contributors are presenting their individual opinions and strategies, which are neither expressly nor impliedly approved or endorsed by Benzinga.
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