Central banks from around the world have been mining gold in recent years, lifting precious metals to record levels. Now, gold bars will soon reach $3,000 for the first time due to ongoing geopolitical tensions and inflation and trade issues. So far, gold futures have risen more than 9% in 2025, surpassing the S&P 500’s 1%. As of 1:17 a.m. ET, gold was trading at about $2,900 per ounce. Earlier this month, it recorded more than $2,900. The central bank has been a net buyer of gold for 15 consecutive years. However, after the start of the Russian-Ukrainian war, they began to increase their purchases, adding a record 1,082 metric tons in 2022, according to the World Gold Council. In 2024, they added 1,000 tons of gold bars for the third consecutive year, about double the number before the conflict. For uncertain times, gold is widely regarded as a safe haven asset. In recent years, concerns about underdeveloped – including the outbreak of two wars in Ukraine and Gaza and the regional banking crisis in the United States will not disappear anytime soon. Concerns about sticky inflation and global tensions remain, and, more importantly, other growing threats, such as the fierce U.S. deficit and protectionist rhetoric surrounding tariffs, are looking for alternatives around the world. “They are looking at, what else can I have? How can I deal with my own conditions and the situation around the world?” said Joe Cavatoni, senior market strategist at the World Gold Council Americas. There are countless reasons for geopolitical risks to move gold to all-time highs. However, a major driver of demand recently – central bank purchases – shows no signs of slowing down. U.S. policy concerns, such as President Donald Trump’s tariff threat and a shocking federal deficit, have led central banks to seek alternatives to the dollar or treasury. Gold is generally recognized and is a vital reserve with credit or other counterparties. Last summer, a survey by the World Gold Council showed that 29% of central banks hope to increase their stake in the next 12 months. Respondents believe that during times of crisis, Gold’s role is safe haven assets, as well as inflation hedging, which are two main reasons. Look at the biggest buyers last year – including Poland, Turkey, China, India – showing that the largest buyers of gold have increased their reserves after geopolitical tensions, such as the Russian-Ukrainian War. According to the World Gold Council, the People’s Bank of China (PBOC) increased its gold holdings for the third consecutive month in January, a major driver of the move. Many investors are still confident that long-term setup will benefit gold. UBS this week averaged its gold forecast to $2,900 in 2025, potentially reaching a peak of $3,200 and ending with an annual rate of $3,000 or above. “Chasing the market is always tricky when everyone seems to be in the same aspect of the trade,” UBS strategist Joni Teves wrote this month. “But just because it has reached another record, calling for the end of the Golden Bulls doesn’t make sense.” Chris Mancini, deputy portfolio manager at Gabelli Gold Fund (Goldx), is confident about the underlying reasons for Gold’s progress. However, he is waiting for a surge in inflows for gold-backed ETFs to confirm that the next leg is higher, as it suggests that American businessmen (who have so far kicked out of the gold rally) are ready to join the deal. If that happens, he thinks gold will easily rise to $3,200 or $3,300 this year. “The real swing factor is whether Americans start buying,” Mancini said. Indeed, JPMorgan noted that gold ETFs set a record inflow last week. Even those more cautious in their prospects after gold rush are not expected to drop quickly. “We think gold is overvalued on many fundamental factors, but there is no reason for a major pullback,” HSBC chief precious metals analyst James Steel wrote on Monday. “The double pillars of the rally – geopolitical and tariff concerns – cannot be quantified in the way the dollar or surrender or even equity movements.” HSBC’s Steel added: “We want the market to stay higher and to get central banks and others to buy correctively.” Investors buying gold seek ways to boost gold can do this with actual physical commodities, although they have to pay for storage and insurance fees and understand that assets are taxed at collect rate tax rates. Gold-backed ETFs can also be used, although unlike physical gold, the expenses related to marketing and management are ongoing expenses. ETFs such as SPDR Gold Trust (GLD) and Ishares Gold Trust (IAU) grew by more than 11% in 2025. The cost ratio of GLD is 0.4%, while the cost of IAU is 0.25%. Another way to take advantage of price increases is through gold miners’ funds, although investors should point out that they are different from investing in physical commodities. Gold mining companies can benefit from rising gold prices, but there are other operating costs and risks associated with operating gold mines. However, gold mining companies that provide dividends can provide traders with additional revenue while stock prices rise. Gold miners’ funds such as the Gabelli Gold Fund can be provided. The $378 million fund adjusted its expense ratio by 1.550%, up 18% to date. Vaneck Gold Miners ETF (GDX) grew by about 18% in 2025, with fees charged 0.51%.
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