Why Did Gold Jump to Its Highest Levels? A Comprehensive Analysis of the Frenzied Rise in 2025

Since the beginning of 2025, the yellow metal has experienced an extraordinary surge not seen in decades, rising by over 47% compared to the start of the year. This remarkable performance has caused gold to outperform most global financial assets, raising questions about the reasons behind this rise and its potential continuation.

Gold Analysis: Driving Factors Behind the Rise

When analyzing gold prices, we find several strong drivers behind this significant increase:

Trade Policies and Tariffs

Since the start of 2025, the new US administration has imposed hefty tariffs on imports from various countries, sparking fears of escalating trade wars. In this environment of uncertainty, capital has flowed into gold as a safe haven for wealth preservation.

Decline in US Interest Rates

On September 17, 2025, the US Federal Reserve announced a rate cut from 4.5% to 4.25%, a decision that strongly supported gold prices. In that month alone, the price of the precious metal jumped by 22.9%.

Geopolitical Tensions

Military confrontations in the Middle East have played a central role in boosting demand for gold. Escalating events between Israel and Iran, along with threats to maritime navigation in the Strait of Hormuz, have raised genuine concerns over disruptions to global supply chains.

Global Inflation Concerns

The International Monetary Fund (IMF) forecasts that the global inflation rate in 2025 will reach 4.2%, levels higher than the historical average. These expectations have prompted investors to seek hedging tools against currency devaluation, with gold being the primary choice.

US Government Shutdown

The controversy over continued federal government funding added an extra layer of uncertainty in financial markets, further boosting safe-haven demand.

Key Data on Gold Prices

Gold trading opened in early January 2025 at $2,623.82 per ounce, gradually rising during the first months. Prices then stabilized somewhat during Q2 before experiencing significant jumps in recent months.

According to the World Gold Council report, the precious metal increased by about 26% in the first half of 2025, with daily trading volume reaching a record $329 billion.

Major Institutional Support for Prices

Gold demand was not limited to individual investors; institutions also played a crucial role:

Gold ETFs

Gold exchange-traded funds saw very strong demand, with holdings increasing by 41%, reaching a total value of $383 billion.

Central Banks

Central banks worldwide continued increasing their gold reserves as part of their strategy to hedge against external economic shocks.

Recent Geopolitical Developments

Significant international developments have impacted gold price forecasts:

• Escalation of the Russia-Ukraine war and threats of wider regional conflict
• Signing of a ceasefire agreement in Gaza after two years of conflict
• Renewed trade tensions between the US and China, with threats of additional tariffs

These developments created a state of uncertainty, which continued to support demand for gold as a wealth preservation tool.

Expected Scenarios for the Coming Months

Scenario 1: Relative Stability

If economic and geopolitical conditions stabilize, and the Fed cuts rates by 25 basis points in October and December, gold may move sideways between $3,500 and $3,600, achieving an annual return of about 34%.

Scenario 2: Most Likely Escalation (

This scenario assumes ongoing economic pressures and geopolitical tensions. The Fed may face a tough dilemma between cutting rates to avoid recession or raising them to curb inflation. In this case:

• Extreme case: Gold could break the $4,000 level and end the year around $4,400
• Moderate case: Gold could finish the year around $4,100 with an annual return of up to 56%

Technical Analysis of Gold

Gold has been in a strong upward trend since mid-2024, breaking important resistance levels such as $3,700 and $3,800.

Current Technical Levels:

• Major resistance: $4,050
• Psychological resistance: $4,000
• First support level: $3,900
• Second support level: $3,819
• Critical support: $3,700

The MACD indicator shows ongoing positive signals, but a slowdown in the histogram may indicate an approaching correction.

Likely Technical Scenario: A short-term technical correction in October toward $3,820–$3,900, followed by a gradual rebound in November and December toward $4,100–$4,200.

Investment Strategies in Gold

Long-term Investment

This approach aims to hold gold for more than a year, primarily to preserve wealth and hedge against inflation. Financial institutions and central banks mainly rely on this strategy.

Short-term Investment

Involves frequent buying and selling within less than a year, possibly even daily trading. This strategy requires a deep understanding of technical and fundamental analysis tools.

Available Investment Options:

• Direct physical gold purchase
• Investment in specialized gold ETFs
• Investment in mining company stocks
• Trading via futures contracts

Portfolio Diversification and Recommended Percentage

Investment experts recommend allocating 15% to 20% of the portfolio to gold to absorb sudden market shocks and reduce overall risk.

Summary and Outlook

The 2025 gold analysis marks a significant turning point, with the precious metal rising unprecedentedly in recent decades. There is a strong likelihood that gold prices will stabilize around $4,100 per ounce by the end of the last quarter of the year.

However, to realize real profits from current gold price movements, investors must be equipped with deep knowledge of technical and fundamental analysis methods, with strict risk management and adherence to a clear, predefined investment plan.