"What is notable is that this breakout was not a random event. It was the intersection of several key fundamental factors, including macroeconomic and geopolitical uncertainty, strong central bank buying, and growing market confidence that interest rates had peaked at 5.25-5.50%. Macroeconomic and geopolitical instability increased rapidly. From sovereign debt risks to persistent inflation and regional conflicts, all of these factors heightened safe-haven demand. Investment flows moved into gold as a reliable store of value."
"Central bank demand surged significantly during 2022-2024, with total annual purchases exceeding 1,000 tonnes, the highest level in decades. The market also began to believe that the Fed's interest rates had peaked at 5.25-5.50%, the highest in more than two decades. Once expectations of a rate peak emerged, gold immediately benefited, as a downward interest rate cycle has always provided a supportive environment for assets like gold."
"In 2025, the gold market performed exceptionally well, with prices rising nearly 60%, continuously setting new highs and reaching a temporary peak around 4,380 USD/oz before pulling back to approximately 4,190 USD/oz at the time of writing. After an extended period of strong price appreciation, profit-taking became inevitable. In addition, expectations surrounding the Federal Reserve's monetary policy shifted slightly. Although confidence in further rate cuts by the Fed remains, the signals they have communicated suggest a more gradual and cautious approach to easing."
Gold consolidated in the 1,600–2,100 USD/oz range from early 2020 to early 2024 before breaking out above 2,100 USD. The breakout resulted from macroeconomic and geopolitical uncertainty, heavy central bank buying, and market conviction that interest rates had peaked at 5.25–5.50%. Macroeconomic and geopolitical instability, including sovereign debt risks, persistent inflation, and regional conflicts, increased safe‑haven demand and shifted investment flows into gold. Central banks purchased over 1,000 tonnes annually in 2022–2024, the highest in decades. Expectations of a rate peak and an anticipated easing cycle further supported gold. Prices rose nearly 60% in 2025 to around 4,380 USD/oz before a pullback amid profit‑taking and softer Fed easing signals.
Read at London Business News | Londonlovesbusiness.com
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