Gold’s Meteoric Rise: Can the Price Break US$4,000 in 2025?

US monetary policy and dollar weakness

Several of the gold market experts the Investing News Network (INN) has spoken to in recent weeks have attributed much of gold’s upward momentum to US monetary policy and the weakening US dollar.

Gold traditionally has had an inverse relationship to the dollar, and has benefited greatly this year as the dollar has weakened. Many agree that this trend is set to continue feeding the gold price in the months ahead.

“I think the main thing that’s driving gold … is this alternative to the dollar,” Will Rhind of GraniteShares, told INN in a mid-September conversation. He added that gold is even becoming a safe-haven alternative to stocks and bonds in today’s climate of increasing government debt and elevated inflation.

While China has been the focal point of gold buying this year, the World Gold Council’s Joe Cavatoni said western investors looking for risk diversification are helping to drive the latest surge in the gold price.

In his view, the Fed has how begun signaling to investors that economic deterioration — and a possible move into a stagflationary environment — is imminent.

“At the heart of all of this is a question around the role of the dollar, the role of dollar-based assets and diversification in portfolios. And that’s where people are looking at alternatives. Alternatives that can give you safe-haven characteristics like gold,” Cavatoni explained in a mid-September INN interview.

Global conflict stoking central bank buying

Strong central bank buying is another key catalyst for gold’s record price streak.

Although the rate at which the world’s central banks are scooping up the precious metal has slowed somewhat in 2025 compared to the last few years, governments are still set to be net buyers this year.

For a fourth year in a row, Cavatoni sees central banks continuing to buy gold despite higher prices, although he noted that they may make price-sensitive adjustments to buy more strategically. According to the World Gold Council’s latest annual central bank survey, conducted in June, 95 percent of the 73 respondents expect to increase their gold holdings over the next 12 months. At the same time, 73 percent expect to lighten their US dollar reserves.

Clem Chambers, CEO of aNewFN.com, told INN that in his view, “governments keep gold because it’s the currency of war.” Essentially, governments sell down their gold in times of peace and refill their coffers as tensions rise — that’s because the yellow metal is considered a strategic reserve, much in the same way as oil.

Countries are building up their strategic reserves of gold as security. Just look at the top two buyers of gold recently: China and Poland. Both are at the center of rapidly escalating geopolitical conflicts.

China has responded to escalating US trade tensions by taking a defensive stance economically, and that has included significantly boosting its gold reserves by 36 metric tons over nine months as of this past July.

Poland is the largest net purchaser of gold this year at 67 metric tons. No doubt, the European nation views the metal as a critical safeguard against escalating hostilities with neighboring Russia.

“Everybody has to build up their gold reserves, because the road that all these countries are on is the road of increasing global stress,” explained Chambers, adding that global leaders understand that “paper is no good when you’re fighting a war.” This is driving the gold price higher as demand comes up against supply.

“There’s only 3,200 tonnes of it mined every year,” he said, “and the price is only going to go one way.”