In Depth: A Nervous World Seeks Shelter in Gold

Gold prices have experienced a dramatic surge in 2024 and 2025, breaking numerous records due to heightened demand from central banks and investors amid global economic uncertainty and a weakening U.S. dollar. Persistent geopolitical conflicts, lingering loose monetary policies from the pandemic era, and expectations of U.S. Federal Reserve interest rate cuts have all contributed to gold’s status as the best-performing alternative asset over the past 18 months. This has resulted in frenzied deal-making among mining companies and has set the stage for a sustained bull market according to analysts and industry leaders. Since the start of 2025, spot gold has risen by 40%, setting 26 new highs in the first half of the year, following 40 records in 2024. From a low of $1,600 per ounce in late 2022, the price has more than doubled, peaking at $3,534.10 on August 8, 2025 [para. 1][para. 2][para. 3][para. 4]. Mining companies have benefited greatly: Newmont Corp. reported a 286% surge in net profit (to $3.95 billion), while China’s Zijin Mining forecast a 54% increase to 23.2 billion yuan ($3.2 billion). Other leading producers, such as Zhongjin Gold and Shandong Gold, also experienced profit growth exceeding 50% [para. 5].

Several factors explain this rally: pandemic-era quantitative easing, de-dollarization trends, and falling U.S. Treasury values have prompted central banks to hedge with gold. Uncertainties from ongoing international conflicts and fluctuating U.S. trade policy under President Donald Trump, whose interest rate reduction efforts conflict with tariff impositions, have further driven investors to seek gold as a safe haven [para. 6][para. 7][para. 8][para. 9][para. 10]. Analysts expect gold prices to remain elevated in the short run and are optimistic for the long-term. Goldman Sachs predicts prices reaching $3,700 per ounce by the end of 2025 and $4,000 by mid-2026. Citibank has also raised short-term targets to $3,500 [para. 12]. Underlying this bullish stance are supply constraints, with over 80% of global reserves already extracted and only 59,000 tons of gold estimated to remain [para. 13].

Central banks and ETFs have become the dominant sources of gold demand. The freezing of Russia’s dollar assets in 2022 spurred emerging-market central banks to accelerate gold buying. From 2022 to 2024, central banks purchased more than 1,000 tons of gold annually, up from 400–500 tons in the previous decade. By 2024, gold comprised 19.8% of global reserves, surpassing the euro and second only to the U.S. dollar [para. 15][para. 16]. China’s gold holdings stood at 73.96 million ounces in July 2025. A 2024 survey found 95% of central banks expect to increase reserves in the coming year [para. 17][para. 18]. While central bank gold purchases fell by 20% year-on-year in early 2025, surging investment demand replaced them as the primary driver. Gold ETF assets reached $382.8 billion by June 2025, up 41% from the year’s start, and overall investment demand soared 117% to 1,028.4 tons [para. 21][para. 22][para. 23].

Soaring gold prices ignited an M&A boom, as miners sought to profit from the upswing. Mining-sector M&A deals totaled $21.1 billion in 2023 and $19.3 billion in 2024. Notable deals included Newmont’s $16.5 billion acquisition of Newcrest, and Zijin Mining’s $1 billion purchase of Ghana’s Akyem mine, among other Chinese overseas acquisitions [para. 27][para. 28][para. 30][para. 31]. Gold revenues now comprise an increasing share of global mining company income, with a 15% revenue jump and a 32% EBITDA rise in 2024. Despite Chinese miners becoming bolder, their overall impact on global supply is still limited. The upward trend in gold, influenced by geopolitical risk, central banks, and investor speculation, remains strong but unpredictable [para. 33][para. 35][para. 36].