Why gold went through the roof this year—and why its price may have been raised permanently

Group 1: Market Performance - The S&P 500 index closed up 0.46% to a record high of 6,909.79, marking a year-to-date increase of 17.48% [1] - The year 2025 is likely to be recorded positively by investors, with only the quiet Christmas week remaining [1] Group 2: Gold Market Insights - The price of gold has surged 71% year-to-date, currently around $4,514 per troy ounce, contrasting with stock market performance [2] - Factors contributing to the rise in gold prices include global trade disruptions, geopolitical tensions, inflation concerns, and the performance of AI-related tech stocks [3] - The introduction of gold exchange-traded funds (ETFs) in 2004 has significantly increased gold prices, with North American gold ETFs holding nearly $200 billion and international ETFs accounting for an additional $175 billion [4] - The emergence of tokenized gold stablecoins is expected to further elevate gold prices as they are pegged to gold reserves [6] Group 3: Long-term Gold Investment Considerations - Despite its recent performance, gold is not considered a reliable long-term hedge against inflation due to its high volatility compared to the low volatility of inflation [7] - Historical data shows that gold can experience prolonged periods of price decline, which may lead to losses for investors attempting to outpace inflation [7][8]