Gold has once again reached record territory, trading above $3 730 an ounce at the start of the week. That marks a 42% surge since January and double the price per ounce recorded in January 2021, when prices stood around $1 852. According to Bheki Mahlobo, the Economics and Policy Editor at The Common Sense, “falling interest rates and global instability are reshaping how investors safeguard their wealth”.

Given that the US Federal Reserve has cut rates by a cumulative 125 basis points over the past year, returns on cash deposits and government bonds have become less appealing. According to Mahlobo, “normally, holding gold carries a trade-off because, unlike a savings account or a bond, it pays no interest. But when other traditional assets offer diminishing returns, gold becomes more of an attractive option”.

Investor caution over the global economy and geopolitics is also fuelling demand for gold. World Gold Council data shows US-listed gold exchange-traded funds (ETFs) purchased 70 tonnes in the second quarter of 2025, nearly four times the decade-long average of 19 tonnes per quarter. Total inflows reached 203 tonnes in the first half of the year, more than five times the ten-year norm. US ETF gold holdings now stand at 1 785 tonnes, worth $189 billion, almost double the 923 tonnes recorded a decade ago.

Central banks have also played a decisive role in fuelling the demand for gold. They have added more than 1 000 tonnes annually for three consecutive years, compared with an average of 400 to 500 tonnes annually in the previous decade.

In the Council’s latest survey, 95% of central bankers expect global gold reserves to rise over the next twelve months, up from 81% in 2024.