Gold’s rally has continued into 2025, with prices up more than 25% and the metal on track for a third consecutive year of double-digit gains — a streak not seen since the mid-2000s. This strong performance has diverged from traditional drivers, as gold has not followed the usual relationship with real yields or the U.S. dollar.
Demand has instead been driven by rising geopolitical tensions, growing trade protectionism and increased central bank purchases. Notably, China and several emerging-market economies have been accumulating gold as they seek to diversify their reserves away from the dollar, helping to underpin prices.
Gold does not have conventional valuation metrics and remains exposed to potential headwinds, including the possibility of higher interest rates and competition from cryptocurrencies. Still, some major institutions are maintaining significant exposure. Rothschild & Co, for example, continues to hold a strategic overweight position in gold, reflecting its view of the metal as an important portfolio diversifier and a form of financial insurance in times of market stress.
Although prices have paused after several months of gains, analysts emphasizing gold’s defensive properties argue the metal is more about wealth preservation than rapid returns. Given ongoing global uncertainties and the potential for further economic and political disruption—factors that could intensify under shifts in U.S. policy—gold’s role as a hedge and store of value remains central to many investors’ strategies.