Gold Price Fluctuations in 2025: An Analysis of the Continuous Rise Phenomenon

Gold Achieves Unprecedented Jumps

The gold market in 2025 is experiencing an extraordinary upward movement, with prices rising by more than 47% since the beginning of the year, outperforming most major financial assets. This sharp surge highlights the role of the precious metal as a safe haven for investors during times of instability.

Underlying Economic Factors Behind the Rise

Tariffs and Trade Protectionism

Since early 2025, the Trump administration has imposed broad tariffs on imports from various countries, raising clear concerns among investors and financial institutions. These trade measures prompted capital to seek safe havens, with gold being the first choice, directly reflecting increased demand and prices.

Decline in US Interest Rates

The US Federal Reserve has begun signaling the possibility of lowering interest rates due to relative weakness in the labor market and economic activity. On September 17, the Fed announced a cut in the interest rate from 4.5% to 4.25%, a decision that fueled gold’s rally by about 22.9% during that month alone.

Ongoing Global Inflation

Despite initial expectations of inflation decline, global inflation rates remained relatively high. The International Monetary Fund forecasts that global inflation will stabilize around 4.2% in 2025, levels higher than the historical average, supporting demand for gold as a hedge against purchasing power erosion.

Geopolitics Ignite Markets

Tensions in the Middle East

Military clashes in the region escalated, especially in June when targeted strikes were launched on vital infrastructure. These developments raised fears of disruptions to maritime trade routes and energy supplies, contributing to increased demand for safe assets.

US Government Crisis

The failure of US institutions to agree on extending the budget led to a partial government shutdown on October 1, creating uncertainty about the US economy’s trajectory and increasing ambiguity for monetary policymakers.

Escalation of Tensions Among Major Powers

Russia has threatened to expand the conflict in Ukraine, and the United States has warned of imposing an additional 100% tariff on Chinese goods, signaling further instability on the international stage.

Gold Market Performance from Demand Side

Institutional Buying Power

According to the World Gold Council, gold increased by 26% in the first half of 2025. This coincided with daily trading volumes reaching $329 billion, reflecting unprecedented institutional interest.

Expansion of Gold ETFs

Gold ETF holdings surged significantly by 41%, reaching a total value of $383 billion, indicating strong confidence from institutional investors.

Central Banks Continue Buying

Central banks have continued increasing their gold reserves as part of a strategy to hedge against external shocks and currency fluctuations.

Technical Analysis of Gold Price

Strong Overall Uptrend

Since approximately mid-2024, gold has been on a steady upward trajectory, consistently surpassing the 100-day moving average, and breaking through strong resistance levels at $3700 and $3800.

Current Resistance and Support Levels

The price currently faces strong resistance at $4050 ( upper Bollinger Band), and a psychological resistance at $4000. Support levels are at 3900, 3819, and 3700 dollars, with 3700 considered a critical support level.

Momentum Indicator Signals

The MACD indicator currently shows positive signals, but the histogram has started indicating a slowdown in buying momentum, which may herald a near-term correction extending to levels around $3820.

Possible Scenarios in the Coming Months

Scenario One: Relative Stability

If economic and geopolitical conditions remain stable without further escalation, gold prices may move sideways between $3500 and $3600, achieving an annual return of around 34% by the end of 2025.

Scenario Two: Escalation and Stagflation

This scenario appears more likely based on current developments. The global economy may experience stagflation (economic slowdown with rising prices), potentially pushing gold prices beyond $4000 and reaching $4100-4400 by year-end, with returns up to 56%.

Medium-Term Technical Outlook

In the most probable case, gold may:

• October: undergo a technical correction toward $3820-3900
• November: gather momentum and resume upward movement toward $3900-4100
• December: continue rising toward $4100-4200

Gold Investment Strategies

Long-Term Trading

Long-term investors aim to hold gold for periods exceeding a year to preserve the real value of savings against inflation. Central banks, commercial banks, and fund managers primarily adopt this approach.

Short-Term Trading

This involves buying and selling gold multiple times over short periods, often for speculation on daily price movements. It requires close monitoring and high proficiency in technical and fundamental analysis.

Alternative Investment Methods

Instead of physical gold, investors can:

• Invest in gold ETFs
• Buy shares of mining companies
• Use contracts for difference (CFDs) to speculate on price movements

CFDs offer leverage opportunities but carry high risks requiring expertise and advanced risk management.

Core Principles of Portfolio Diversification

Investment experts recommend allocating at least 15-20% of the investment portfolio to gold, due to its valuable hedging properties against sudden economic and political shocks.

Summary

Gold prices in 2025 reflect a complex mix of economic and geopolitical pressures. The outlook indicates a strong likelihood for gold to stabilize around $4100 in the next three months. However, realizing these opportunities effectively requires a deep understanding of market mechanics and professional analysis tools.