Why gold prices are rising now, how long they could keep rising, and should you invest or is it too late? Here’s the 2025 gold price forecast

Core Insights - Gold prices have reached a historic high of $4,007 per ounce, marking the first time it has crossed the $4,000 threshold, with a surge of over 4% this week indicating strong market interest in safe-haven assets [1][2][7] Economic Factors - The rise in gold prices is attributed to multiple global and domestic pressures, including the ongoing U.S. government shutdown, which has increased market uncertainty, and expectations of Federal Reserve interest rate cuts that make yield-bearing assets less attractive [2][10] - Currency fluctuations, particularly a weaker U.S. dollar, have made gold cheaper for foreign buyers, further driving demand [5][21] Geopolitical Influences - Global tensions, such as political unrest in France and Japan and the ongoing Russia-Ukraine conflict, have heightened demand for secure investments like gold [3][11] - Central banks, notably China's People's Bank of China (PBOC), are actively increasing their gold reserves, which supports rising prices [3][12] Central Bank Activities - The PBOC has been on a gold buying streak for 11 consecutive months, adding approximately 1.24 tonnes in September 2025, bringing its total reserves to about 2,303.5 tonnes [12][13] - India's Reserve Bank of India (RBI) has also been incrementally adding to its gold reserves, which stand at around 770 tonnes as of mid-2025, focusing on diversification and inflation-hedging strategies [14][24] Market Dynamics - Analysts caution that while gold may experience short-term volatility, long-term fundamentals remain strong, with economic instability and geopolitical risks likely to keep prices elevated through 2025 [4][9] - Increased trading volumes in both physical and paper gold markets indicate heightened activity, which could influence short-term price movements [7][17] Investment Considerations - For investors, this moment is critical, with Exchange-Traded Funds (ETFs) like SPDR Gold Shares (GLD) and iShares Gold Trust (IAU) providing exposure to gold without the need for physical ownership [8][16] - Experts recommend a moderate allocation of around 5-15% of a portfolio to gold, balancing risk and reward while considering the potential for price corrections [21][24] Strategic Outlook - The outlook for gold remains cautiously bullish for the next 12-18 months, with opportunities for gains but also risks of price corrections, necessitating close monitoring of monetary policy, inflation trends, and geopolitical developments [15][24] - Prominent investors advocate for significant gold allocations in portfolios, with suggestions ranging from 15% to 25% due to ongoing economic uncertainties and inflationary pressures [19][22]