Why Did Gold Surge to Its Peak? Comprehensive Gold Analysis for 2025 and Beyond

When it comes to wealth preservation, gold has always played a central role in the global financial system. Not only because it is a precious metal used in jewelry and industry, but also because it is considered a safe haven that investors and institutions turn to during economic crises or geopolitical tensions. This year in particular, gold experienced an extraordinary surge that perhaps hasn’t been seen in half a century.

Since the beginning of 2025, Gold analysis has shown a remarkable decline as prices have risen by more than 47%, surpassing the returns of most major global financial assets. This impressive performance raises an obvious question: what factors have driven gold prices to achieve these successive jumps? And will this momentum continue to rise in the remaining months of the year?

Main Drivers of Gold Price Increase in 2025

Trade and Protectionist Policies

U.S. trade policy has been one of the main demand drivers for gold. Since the start of the year, a new American administration imposed high tariffs on imports from most countries, reaching a peak in mid-April. This tariff escalation prompted investors and institutions to seek safe havens, with gold being the natural choice.

Changes in U.S. Interest Rates

The U.S. Federal Reserve has signaled clear indications of possibly cutting interest rates to counteract weakness in the labor market and economic activity. Indeed, on September 17, the Fed cut the interest rate from 4.5% to 4.25%, a move that prompted investors to increase their gold holdings, leading to a 22.9% jump in the same month.

Geopolitical Turmoil in the Middle East

The escalation of military conflict between Israel and Iran and their allies has raised deep concerns about the disruption of navigation through the Strait of Hormuz, one of the most vital oil arteries, as well as international maritime trade routes. These security fears have driven gold price analysis toward strong bullish forecasts.

US Government Financial Crisis

The U.S. Congress’s failure to reach an agreement on extending the Continuing Resolution led to a government shutdown starting October 1. This shutdown created uncertainty about the health of U.S. economic data and growth prospects, further fueling demand for gold.

Market Data: Evidence of the Rise

According to the latest World Gold Council report, gold accounted for the best performing asset during the first half of 2025 with 26% of gains. But the most striking figures relate to trading volumes:

• Daily trading volumes broke a record at $329 billion
• ETFs increased their holdings by 41% to reach $383 billion
• Central banks continued buying gold to bolster their international reserves

These figures reflect not only investment demand but also genuine confidence from major financial institutions in gold as a hedge tool.

Inflation and Different Scenarios

Global inflation forecasts have become another key driver. The International Monetary Fund projects a global inflation rate of 4.2% in 2025, higher than the historical average of 2-3%. Concerns over supply chain disruptions due to geopolitical tensions and climate issues have deepened these forecasts.

Based on this background, two main scenarios can be outlined:

Scenario One - Stability: If conditions remain as they are without sharp developments, and the Fed gradually cuts rates to 3.75%, gold could move within the range of $3,500-$3,600, achieving an annual return of around 34%.

Scenario Two - Escalation: The more likely scenario currently involves a global inflationary recession (economic slowdown with rising inflation), continued U.S. government shutdown, and renewed escalation in U.S.-China trade tensions. In this case, gold could reach $4,100-$4,400 with an annual return exceeding 56%.

Technical Analysis Perspective on Gold

From a technical standpoint, gold has been in a strong upward trend since mid-2024. It recently broke through significant resistance levels at $3,700 and $3,800, and is currently facing strong resistance at $4,050 (upper Bollinger Band).

The MACD indicator still shows positive signals, but the histogram has begun to show signs of slowing buying momentum, which may indicate a near-term correction. Critical levels to watch:

• Resistance level: $4,050
• First support level: $3,900
• Second support level: $3,819
• Critical support level: $3,700 (a break below could mean a deeper correction)

The most probable technical scenario suggests a moderate correction toward $3,820-$3,900 during October, followed by a gradual upward return in November and December toward $4,100-$4,200.

Recent Geopolitical Developments and Their Impact

Several influential geopolitical developments have occurred:

• The Ukraine War: Renewed Russian escalation with warnings of expanding the conflict — supportive of gold
• Ceasefire in Gaza: Signing of a ceasefire agreement — negative for gold
• U.S.-China Trade Tensions: Threats of an additional 100% tariffs — supportive of gold

The net momentum of these developments has generally been supportive of gold.

How to Invest in Gold

Investors have several options:

Long-term Investment: Buying gold as a hedge against inflation and economic volatility. Central banks and financial institutions follow this approach, as do portfolio managers who allocate 15-20% of their portfolios to gold.

Short-term Trading: Entering and exiting positions multiple times over months, requiring careful monitoring and mastery of technical and fundamental analysis tools.

Gold ETFs: Offer an easy way to invest without physical possession.

Mining Stocks: For investors seeking indirect exposure.

CFDs: An advanced tool for speculating on price movements, but it involves high risks and requires experience in portfolio management and technical analysis.

Investment Recommendations

Given current developments:

• Conservative investors: Should hold at least 15% of their portfolios in gold as a hedge against shocks.
• Active investors: Can capitalize on current volatility, waiting for a correction to $3,820-$3,900 before re-entering to benefit from the next bullish wave.
• Traders: Should focus on the support and resistance levels outlined above.

Conclusion

Gold prices today reflect a complex reality of economic and geopolitical pressures. With a strong likelihood that gold analysis will settle on forecasts indicating levels of $4,100 by the end of Q4 2025, understanding the fundamental and technical drivers remains essential to seize available opportunities. Gold remains the optimal choice for wealth preservation in times of uncertainty.