Gold has been a safe haven asset for centuries during times of political and economic uncertainty. In 2025, this status has only strengthened: the precious metal’s rapid price surge has outperformed nearly every other major asset class.

According to the World Gold Council, inflows into gold-backed funds reached $21 billion in the first quarter of 2025 – the highest level since the Covid-19 pandemic.

Gold prices hit historic highs in April, surpassing $3,500 per ounce, fueled by growing demand amid new trade tariffs imposed by U.S. President Donald Trump’s administration.

Why is Gold Back in the Spotlight?

• Inflation Hedge. New tariffs are pushing global prices higher, and gold traditionally acts as a protection against currency devaluation.
  
• Weaker Dollar. Amid unstable U.S. trade policies, the dollar fell to a three-year low against major currencies, making gold more attractive for international investors.
  
• Cultural Demand. In China and India – the largest gold markets – buying gold remains deeply ingrained in traditions, further sustaining demand.
  
• Central Bank Buying. In 2024, central banks bought more than 1,000 tons of gold for the third consecutive year, aiming to reduce reliance on the U.S. dollar. According to the World Gold Council, central banks now hold around 20% of all gold ever mined.
  

Main Growth Drivers:

• Record purchases by central banks.
  
• Rising geopolitical instability and trade tensions.
  
• Declining confidence in the U.S. dollar and Treasury bonds.
  
• Strong traditional demand for physical gold in Asia.
  

Potential Risks to the Rally

While the trend remains strong, analysts warn that a major de-escalation of tariff wars or a peace deal between Russia and Ukraine could lead to a pullback in gold prices.

However, support from central bank buying remains the market’s key pillar. And currently, there are no signs that large holders plan to sell their reserves.

Physical Gold: Practical Considerations

Although gold is highly liquid, physical ownership involves costs for storage, security, and insurance. Recently, logistical bottlenecks emerged as 400-ounce London bars had to be recast into 100-ounce bars to meet COMEX requirements in the U.S., slowing down delivery during surges in demand.

In 2025, gold has once again proven itself as the ultimate safe-haven asset for investors.

Amid political uncertainty, global trade wars, and a weakening dollar, gold remains one of the most attractive defensive assets worldwide.