Global financial markets underwent a radical transformation in 2025, with gold prices unprecedented record highs, surpassing $4,530 per ounce . This astonishing surge was not a coincidence, but rather the result of a confluence of complex economic and geopolitical factors that drove investors and central banks to seek refuge in the precious metal, amidst eroding confidence in traditional fiat currencies and escalating risks to the global economy.
Gold as a safe haven in the face of the unknown
The rush to buy gold is no longer just about making a quick profit; it has become a necessary defensive strategy. According to a report published by Bloomberg and reviewed by Al Arabiya Business, investors have found in gold the only safe haven to escape the "financial and political unknown." This trend stems from escalating trade wars between major powers, increasing pressure on the independence of central banks, and worsening government budget deficits in many major economies, all of which have made traditional assets risky.
Historical context: Why gold now?
Historically, gold has always served as a "store of value" throughout the ages, especially during times of crisis and war. Unlike paper currencies, which governments can print without limit, leading to inflation and eroding purchasing power, gold possesses the advantages of scarcity and independence. In the current environment of low interest rates, gold has become even more attractive. Although it does not generate periodic returns or bank interest, the opportunity cost of holding it has decreased, making it more attractive than bonds and other assets, especially since it is an asset that cannot be frozen, bankrupted, or printed by political decree.
Central bank actions and ending dollar dominance
One of the most significant drivers of this historic surge is the strategic shift in the policies of global central banks, particularly the People's Bank of China. China continued its gold purchases for 13 consecutive months until November 2025, a clear move aimed at diversifying its reserves and reducing its over-reliance on the US dollar. This trend reflects the desire of emerging economies to protect their assets from potential sanctions or sharp fluctuations in exchange markets, and these purchasing policies are expected to continue with strong momentum throughout 2026.
Price jump and future expectations
Looking at the numbers, gold closed 2024 at $2,620 an ounce, achieving a huge jump of nearly 65% in just one year to reach its levels in 2025. This meteoric rise is a dangerous indicator of the extent of global fears, and confirms that markets are preparing for a long period of economic and geopolitical volatility, making gold the most important element in investment portfolios for the coming period.
