Gold futures in New York have surged nearly 71% this year, heading for their biggest annual gain in 46 years. The most recent time gold had a year as strong, Jimmy Carter was in the White House, a crisis with what would become Iran was playing out in the Middle East at 60 Minutes’ flagship time slot — and inflation still reigned supreme with America in an energy crisis.
Today, tariffs are muting global trade, conflict is roiling with Russia’s war in Ukraine, there have been flare-ups between Israel and Iran and the United States is hijacking oil tankers off the coast of Venezuela. Investors tend to also look toward a safe haven like gold in times of uncertainty.
Gold is a classic safe-haven investment, and investors have long looked to the yellow metal as an asset that will keep its value in times of crisis, inflation or when currencies lose value.
“Uncertainty is still a key driver in the global economy,” said Joe Cavatoni, a senior market strategist at the World Gold Council. “In this environment, gold has actually become more appealing as a strategic diversifier, and a source of stability,” the analysts wrote.
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To some, the flaw of gold is that it lacks income like bonds do. But when the Federal Reserve lowers interest rates, as it has been doing over the past several months, bond yields typically drop, which can make gold more attractive.
Gold futures were trading around $2,640 a troy ounce at the start of this year. The yellow metal reached over a record high $4,500 an ounce on Monday. One analyst at JPMorgan Chase estimates prices could climb to more than $5,000 a troy ounce by 2026.
Gold’s climb of 71% this year has left the S&P 500 in the dust, up just 18%. Gold futures rose 27% and the S.&P. gained 24% in 2024.
‧ Expectations for some Fed cuts in 2026 are also boosting gold. A softer dollar is also helping lift the price, as it makes gold more affordable for international investors.
Gold jewelry makers and those who own the metal, by way of chains or earrings, are reaping rewards from elevated prices. And this gold rush isn’t just being driven by Americans snapping up gold bars at Costco — it’s countries buying it by the ton.
The shift became apparent after Russia invaded Ukraine in 2022. When Western governments froze Russian dollars held offshore, the government in Russia — and in China too — needed to find ways to minimize exposure to American decrees, Lindahl said.
“The current wave of central-bank buying is different exactly because it has geopolitics at its centre,” Ole Hansen, head of commodity strategy at Saxo Bank wrote in a note. “Sovereign reserve freezing and more general fragmentation of the global financial system have brought a structural element to gold demand that is probably here to stay for several years,” Long wrote.
According to the World Gold Council, central banks around the world have bought more than 1,000 tons of gold highly every year for the last three years, a sharp reversal from what was in previous decade an average of 400 to 500 tons.
The rise of gold has been followed by other precious metals including silver, platinum and palladium.
Silver futures have surged 146% this year, with the spot price hitting levels not seen since September 2019, while platinum futures are up nearly 150% and palladiumfutures are up 100%.
For investors, precious metals are “a hedge against an increasingly uncertain world,” said Hakan Kaya, a portfolio manager at Neuberger Berman.
That trend could continue. Lindahl at Currency Research Associates said he believes gold will continue to climb in 2026. Since central banks are stocking up on gold, that can mean less bullion for trading on the market. More demand from normal investors and less supply could push prices higher.
Also contributing to the increase in demand for precious metals: worries about huge government deficits and debt loads, according Matt Maley, chief market strategist at Miller Tabak + Co.
“As investors have become more aware of those problems, they’ve been turning to gold as a safe haven,” said Maley.
