EXPLAINERNews|Business and EconomyWhy gold’s historic rally is about more than just TrumpThe price of gold has soared 50 percent in 2025. Experts say the ‘safe haven’ asset is becoming an all-occasions asset.
The price of gold has reached a historic high, surpassing $4,000 per troy ounce (31.1g) as global investors have increasingly turned to this asset over the past year.
The price of gold has reached a historic high, surpassing $4,000 per troy ounce (31.1g) as global investors have increasingly turned to this asset over the past year.
On Tuesday, gold futures, which are agreements to buy or sell gold at a predetermined price, exceeded this threshold. This was followed by the spot price of gold on Wednesday afternoon in Asia.
Gold is traditionally regarded as a "safe haven asset" during periods of economic uncertainty, due to its status as a tangible commodity that can be owned and stored. Recent trends, however, suggest a shift, with gold emerging as a more versatile investment option.
The price of gold has increased by over 50% since the beginning of 2025. This surge has been attributed largely to the return of Donald Trump as President of the United States at the start of the year. Notably, gold prices spiked in April following the initiation of a global trade war and again in August amid challenges to the Federal Reserve's independence.
Additional factors contributing to gold's ascent include Japan's leadership election, a US government shutdown, and France's political crisis following the resignation of Prime Minister Sebastien Lecornu.
On Tuesday, gold futures, which are agreements to buy or sell gold at a predetermined price, exceeded this threshold.
The victory of Sanae Takaichi in Japan's Liberal Democratic Party leadership race has significantly impacted this week's price surge. Takaichi's policies, which include aggressive deficit spending and tax cuts, have influenced market dynamics, prompting a depreciation of the yen and a corresponding rise in gold demand.
Comparative Analysis with Previous Years
The current rise in gold prices is notable. Historically, gold prices tend to rise during economic uncertainty, stabilize, and then rise again amidst unpredictability. Between June 2020 and February 2024, prices fluctuated between $1,600 and slightly over $2,100 per ounce. In 2024, prices increased by approximately 30%, but this was outstripped by the substantial rise in the first nine months of 2025.
While gold has reached unprecedented highs this year, it is not the first time the asset has experienced significant increases. In the 1970s, the price soared after US President Richard Nixon ceased the dollar's convertibility into gold, rising from $35 an ounce in 1971 to $850 an ounce by 1980.
Unlike in previous instances, the current rise in gold prices coincides with gains in the US stock market. Despite concerns about a US government shutdown, both the S&P 500 and Nasdaq Composite Index reached record highs recently, indicating that gold is increasingly perceived as a primary investment option.
Gold is now considered an "asset for all occasions," demonstrating resilience and value as both a risk hedge and a growth investment amidst geopolitical risks globally.
While US President Donald Trump has an ongoing impact on gold prices through trade and fiscal policies, he is one of several influential factors. Investors are also considering fiscal policies in countries like Japan, geopolitical risks, US trade policies, and potential changes in US interest rates. These elements collectively shape the current investment landscape for gold.
Based on reporting by Al Jazeera.