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Gold has surged to historic highs, breaching the $3,700 mark for the first time on September 17, 2025, before climbing further to $3,723.21 today, a record-setting rally that represents a 41.76 per cent year-to-date gain.
By Ryan Chigoche
The rally cements gold’s status as the go-to safe haven in a world grappling with economic fragility, supply chain shocks, and rising geopolitical tensions.
This surge is more than a price milestone. It signals a deep shift in global financial markets as investors abandon riskier assets and seek protection in hard money.
The rally was sparked by the U.S. Federal Reserve’s first rate cut of 2025, lowering the federal funds rate by 25 basis points to 4–4.25 per cent on September 16–17.
The move followed softer inflation data and weakening labour markets, reducing the opportunity cost of holding non-yielding assets like gold.
The cut also weakened the U.S. dollar, which slid to a year-to-date low of 96.56, making gold cheaper for international buyers.
The dollar index has dropped 2% in the past month, amplifying gold’s inverse relationship with the greenback.
At the same time, bond market volatility and multi-month lows in real yields on 10-year Treasuries have driven investors away from fixed income and into bullion.
Central banks have been the backbone of this rally.
Purchases are on track to hit 900 tonnes in 2025, continuing three straight years of record buying above 1,000 tonnes. China and India lead this shift, reducing exposure to dollar-denominated reserves in a sign of accelerating de-dollarisation.
The U.S. dollar’s share of global reserves has slipped to 57.8 per cent, and refiners and miners are struggling to keep pace with the demand surge.
Goldman Sachs has called this central bank buying “stronger than expected” and expects it to continue well into 2026, keeping supply tight and prices elevated.
Geopolitical tensions have only deepened gold’s appeal.
The revival of the U.S.–China trade war following President Trump’s April 2025 “Liberation Day” tariffs has stoked fears of stagflation and global supply disruptions. Conflicts in Ukraine and the Middle East have further unsettled investors, who are piling into gold-backed exchange-traded funds (ETFs) at levels not seen since 2023. Over-the-counter gold trading has also surged, creating a feedback loop of demand that keeps pushing prices higher.
Macroeconomic conditions are also tilting in gold’s favour. With U.S. core CPI expected at 3.1% this year and nonfarm payroll data pointing to a slowing economy, recession fears are mounting. The World Gold Council reports gold rose 26% in the first half of 2025, outperforming all major asset classes and reaffirming its status as a hedge against both inflation and economic downturns.
For gold producers, the price rally is nothing short of a windfall. Mines across the globe, including those in Zimbabwe, are enjoying a perfect storm of record prices and rising output.
Zimbabwean producers have reported improving production thanks to new capital investment and mechanisation projects, and the timing could not be better. The resulting surge in foreign currency earnings is expected to bolster government revenues through royalties and taxes while improving liquidity in the broader economy.
Gold’s march past US$3,700 also fits into a long historical trend of price milestones during times of global stress. Fixed at just $35 per ounce under Bretton Woods until 1971, gold hit $850 in 1980 — equivalent to about US$3,200 today — during the oil shocks and stagflation crisis.
After years of weakness in the 1980s and 1990s, prices climbed to US$1,900 in 2011 amid the global financial crisis.
The COVID-19 pandemic pushed gold beyond US$2,000 in 2020, and by February 2025, prices had already crossed US$2,900 before accelerating toward today’s levels. This year’s 41% rally has even outpaced the explosive gains seen in early 2020, driven by modern forces such as deglobalisation, competition from digital assets, and algorithmic trading volatility.
Analysts are already looking ahead. Goldman Sachs, which recently raised its year-end target to US$3,700, now sees gold hitting US$4,000 by mid-2026 and possibly spiking to US$5,000 if confidence in U.S. fiscal and monetary policy erodes further.
J.P. Morgan projects a slightly more conservative US$3,675 by the fourth quarter of 2025, with prices also rising to US$4,000 next year.
