Goldhas surged to historic highs, breaching the $3,700 mark for the first time on September 17, 2025, before climbing further to $3,723.21 today, a record-setting rally that represents a 41.76 per cent year-to-date gain. The rally cements gold’s status as the go-to safe haven in a world grappling with economic fragility, supply chain shocks, and rising geopolitical tensions. This surge is more than a price milestone.
It signals a deep shift in global financial markets as investors abandon riskier assets and seek protection in hard money. Federal Reserve’s first rate cut of 2025, lowering the federal funds rate by 25 basis points to 4–4.25 per cent on September 16–17. The move followed softer inflation data and weakening labour markets, reducing the opportunity cost of holding non-yielding assets like gold.
The cut also weakened the U.S. dollar, which slid to a year-to-date low of 96.56, making gold cheaper for international buyers. The dollar index has dropped 2% in the past month, amplifying gold’s inverse relationship with the greenback.
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At the same time, bond market volatility and multi-month lows in real yields on 10-year Treasuries have driven investors away from fixed income and into bullion. Central banks have been the backbone of this rally. Purchases are on track to hit 900 tonnes in 2025, continuing three straight years of record buying above 1,000 tonnes.
China and India lead this shift, reducing exposure to dollar-denominated reserves in a sign of accelerating de-dollarisation. dollar’s share of global reserves has slipped to 57.8 per cent, and refiners and miners are struggling to keep pace with the demand surge. Goldman Sachs has called this central bank buying “stronger than expected” and expects it to continue well into 2026, keeping supply tight and prices elevated.
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