Gold Breaks Record, Predicted for Continued Gains?
The price of gold (XAU/USD) experienced a remarkable rise throughout 2025, even reaching a record high above $4,500 per ounce by the end of the year. Despite a slight decline ahead of the holidays, gold prices continued to trade at very high levels, recording a gain of more than 70% compared to last year. This made it the best performance since 1979.
The increase in gold prices was driven by several important factors. One of these was the demand for safe-haven assets due to geopolitical tensions and global economic tensions. Investors continued to seek a safe haven amid heightened global risks. Furthermore, the Federal Reserve's policy of cutting interest rates by 75 basis points (bps) in 2025, along with market expectations of further cuts next year, also strengthened gold's appeal.
In addition to loose monetary policy, the weakening US dollar also contributed significantly to the rise in gold prices. A weaker dollar made gold cheaper for holders of other currencies, increasing demand from international investors. This condition further strengthened the gold price rally throughout the year.
The central banking sector also plays a significant role in influencing gold prices, with many central banks actively purchasing gold to bolster their reserves. Furthermore, inflows into gold-backed exchange-traded funds (ETFs) have further boosted prices. Data shows that gold ETF holdings have increased every month except May, indicating strong demand from institutional investors.
On December 24, 2025, gold prices experienced a slight decline after reaching $4,526, but remained at a very high level of around $4,470 per ounce. Increased market volatility ahead of the holidays prompted profit-taking, but the bullish trend remained intact. Gold prices still recorded a nearly 3% increase throughout the week, indicating strong momentum.
Looking ahead, analysts expect gold prices to continue rising through 2026, with some major banks like Goldman Sachs predicting gold prices could reach $4,900 per ounce by the end of next year, driven by falling interest rates and ongoing geopolitical tensions. Despite the potential for high volatility, strong demand for gold remains a key driver.
However, there are several risks that could hinder the rise in gold prices, such as a recovery in the US dollar or rising bond yields, which could reduce gold's appeal. Nevertheless, the long-term outlook for gold remains positive, with many believing the rally will continue.
Overall, 2025 is a strong year for gold, and 2026 is likely to bring further bullish momentum, despite persistent resilience in global markets. Gold is predicted to remain a top investment choice amidst continued global economic recovery. (asd)
Source: Newsmaker.id
