There have been many defining trends in the investment world that could be used to describe 2025 thus far. The falling US dollar, volatility stemming from the erratic policies coming out of the White House, stock markets hitting record high after record high. The list goes on. But one of the more interesting trends to analyse has been the galloping price of gold.
Gold has had one of its most dramatic years in history in 2025. For one, the precious metal has clocked several new all-time records of its own, which is significant, given humans have been putting a price on gold for literally thousands of years before the first stock exchange began operating.
It's hard to believe now, but gold was selling for just US$2,600 an ounce or so at the start of 2025. At the time, that was a very elevated price point indeed. By mid-March, though, gold prices had crossed the US$3,000 per ounce mark and just kept on climbing.
Just this month, the yellow metal hit another momentous milestone, this one above US$3,500 an ounce. Today, that high watermark has continued to inch higher, with gold futures commanding a price of over US$3,600 last night.
This puts gold's gains for 2025 alone at an astonishing 38%. That's far more than either the S&P/ASX 200 Index (ASX: XJO) or the American S&P 500 Index (SP: .INX) has delivered. Even Nvidia Corp (NASDAQ: NVDA) stock has 'only' shot up by 23.4% this year to date.
As a result, most ASX gold shares, as well as the ASX's gold-backed exchange-traded funds (ETFs), have enjoyed phenomenal returns this year.
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Expert: Gold price can hit US$4,500 an ounce
Given that kind of eight-month gain is highly unusual for gold – an asset that has spent decades treading water before – many investors might be wondering just how much further the precious metal can climb.
Well, a lot higher, if one expert is to be believed. According to reporting in the Australian Financial Review (AFR) this week, analysts at investment bank Goldman Sachs have just told clients to "diversify even more into commodities like gold".
Goldman analyst Samantha Dart told the report that gold's outlook remains bullish, thanks to a combination of "threats to American institutions and increasing supply concentration".
Those threats to American institutions come mainly in the form of President Donald Trump's threats against the independence of the US Federal Reserve. Trump has long discussed the possibility of ending Fed chair Jerome Powell's term early. But he also caused concern last month when he attempted to fire another member of the Fed's board.
Trump has long complained that interest rates in the United States are too high. But imposing his will on what is supposed to be an independent arm of the government in the US could indeed cause panic on the global financial markets. That, at least in Goldman's opinion, bodes rather well for gold. For other investments like stocks and bonds? Not so much.
Here's some more of what Dart had to say:
More specifically, a scenario where Fed independence is damaged would likely lead to higher inflation, higher long-end rates (lower bond prices), lower stock prices and an erosion of the US dollar's reserve currency status. In contrast, gold is a store of value that doesn't rely on institutional trust.
Should private investors look to diversify more heavily into gold, as have central banks, we see potential upside to gold prices even above our tail risk scenario of $US4500 an ounce, which itself is already well above our $US4000 mid-2026 baseline.
So a US$4,000 or even US$4,500 gold price is a definite possibility, at least according to this expert. Let's see if the precious metal can indeed keep on shining this brightly.
