{"id":63778,"date":"2025-09-03T18:13:59","date_gmt":"2025-09-03T18:13:59","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2025\/09\/03\/whats-behind-golds-record-breaking-rise-and-how-high-could-it-go\/"},"modified":"2025-09-03T18:13:59","modified_gmt":"2025-09-03T18:13:59","slug":"whats-behind-golds-record-breaking-rise-and-how-high-could-it-go","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2025\/09\/03\/whats-behind-golds-record-breaking-rise-and-how-high-could-it-go\/","title":{"rendered":"What's behind gold's record-breaking rise, and how high could it go?"},"content":{"rendered":"
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<\/p>\n

The price of <\/p>\n

gold<\/p>\n

hit a record high of US$3,565 per ounce on Wednesday, amid a weak <\/p>\n

U.S. dollar<\/p>\n

and increasing confidence that the United States <\/p>\n

Federal Reserve<\/p>\n

will cut <\/p>\n

interest rates<\/p>\n

later this month. The Financial Post dug into the factors behind gold\u2019s blockbuster year and what analysts think lies ahead for the precious metal. <\/p>\n

What\u2019s behind the surge?<\/h2>\n

The price of gold has risen roughly 20 per cent over the last six months and 40 per cent since September 2024. It reached its previous all-time high of US$3,500 per ounce on April 22, following a stock market slump after U.S. President Donald Trump criticized Federal Reserve chair <\/p>\n

Jerome Powell<\/p>\n

for not moving to cut interest rates. <\/p>\n

Since then, concerns over the <\/p>\n

Fed\u2019s independence<\/p>\n

have continued to grow, as Trump is embroiled in an attempt to fire governor Lisa Cook from her role. Spooked investors are now pushing gold\u2019s spot price to new levels on expectations of a 25-basis-point rate cut at the central bank\u2019s next meeting on Sept. 17 \u2014 the likelihood of which the market puts at 91 per cent, according to the CME FedWatch tool. <\/p>\n

The next U.S. jobs report, due Friday, will provide yet more insight into the country\u2019s economic wellbeing and inform the Fed\u2019s decision, spurring more conjecture about its next move. <\/p>\n

Rosenberg Research & Associates Inc. said in an Aug. 27 report that the \u201cmost bullish development\u201d from gold\u2019s prior run-up in April was that prices surged \u201cdespite headwinds from traditional valuation drivers such as elevated real interest rates and a surging U.S. dollar.\u201d <\/p>\n

Who is buying gold?<\/h2>\n

Investors traditionally gravitate toward gold as a safe store during tumultuous times and there has been no shortage of tumult in 2025, thanks to U.S. tariffs, global geopolitical risks and inflationary pressures. <\/p>\n

The tariff- and Fed-related uncertainty has also weighed on the U.S. dollar, making it less expensive for global buyers to scoop up bullion. The U.S. dollar index is down around nine per cent this year against a basket of six other currencies. <\/p>\n

As they seek to diversify their reserve assets, central banks have been a \u201ckey pillar of global demand,\u201d purchasing\u00a0gold at an \u201ceye-watering pace\u201d in 2024, exceeding 1,000 tonnes for the third year in a row, according to the World Gold Council. <\/p>\n

\u201cA more splintered world marked by more frequent conflict, combined with growing concerns over elevated government debt levels and questions about the long-term role of the U.S. dollar in the international system, could strengthen the case for gold as a diversifier against persistently elevated levels of uncertainty,\u201d according to a June report from RBC Wealth Management. <\/p>\n

How high could gold go?<\/h2>\n

J.P.\u00a0Morgan Research\u00a0said in a June note that due to \u201crecession probabilities and ongoing trade and\u00a0tariff risks,\u201d it expects gold prices to average US$3,675 per ounce by the last quarter of 2025 and rise toward US$4,000 per ounce by the second quarter of next year. <\/p>\n

\u201cWe remain deeply convinced of a continued structural bull case for gold and raise our price targets accordingly,\u201d Natasha Kaneva, head of global commodities strategy at J.P.\u00a0Morgan, said in a report. <\/p>\n

Desjardins said on Aug. 28 that the global shift by central banks from the dollar to gold shows \u201cno signs of letting up,\u201d and that \u201congoing economic and geopolitical uncertainty\u201d should help gold end the year around US$3,400 per ounce. <\/p>\n