All that Glitters Is Gold

Original Published Date on Medium: August 26th, 2025

Reference: https://medium.com/@virikajuneja/all-that-glitters-is-gold-6866166316d0

Why has the price of Gold shot up from around USD 2500 per ounce (oz) in Aug 2024 to around USD 3400 per oz in Aug 2025, an increase of 36%. Goldman Sachs Research has predicted the price of gold to touch USD 3700 per oz by end of 2025.

Lets analyze key reasons for this sharp rise.

1) Central Bank Buying: Central banks across the world have become net buyers of gold versus net sellers. This demand trend increased after the freeze in Russian reserves in 2022.

2) Hedge against Market Volatility: Given the current market uncertainty any higher inflation and potential labor market weakness is likely to trend the market towards safer investments. This was also stated recently by the Fed in the Jackson Hold conference. Gold has traditionally served as a hedge against market uncertainty

3) Hedge against Lower Interest Rates: Traditionally when the interest rates go down, markets turn towards safe havens such as gold. The Fed is likely to rate cuts in 2025. This is likely to spur an increase in gold prices.

Given the upcoming Fed rate cuts and market uncertainty, seems like investors will get their Pot of Gold!