Record-setting gold is having its best year since the 1970s

• Gold prices are on track for their best year since 1979.

• Bullion is up 39% year-to-date, outpacing the stock market’s gain.

• Economic uncertainty and expectations for lower rates are some of what’s driving the momentum.

Gold bugs are having their best year in decades.

That’s thanks to bullion’s stunning rally in 2025, with the price of gold rising more than 39% to date. That’s outpaced gains in stocks, with the S&P 500 up just 12% year-to-date.

The big jump this year puts gold on track for its best performance since 1979, when its price soared 130%, according to historical data from SD Bullion. That was largely due to inflation running hot while growth slowed in the economy, sparking a flight to safe-haven assets.

A host of similar reasons have caused the demand for gold to swell this year. Here’s what analysts say is driving the rally in 2025.

Investors are eyeing a large number of unknowns on the horizon, and uncertainty often causes traders to flock towards safe-haven assets like gold.

For one, the US has yet to feel the full effects of President Donald Trump’s tariffs, which economists have said could boost inflation and lower economic growth.

Geopolitical tensions are also on investors’ minds, with ongoing wars in the Middle East and Ukraine fanning fears of wider armed conflict.

The US economy, meanwhile, has flashed signs of weakening in some areas, like the job market. That has amplified concerns that the US could slip into a recession.

“The fact that gold is uncorrelated from the S&P 500 and US Treasuries and is a portfolio hedge that is working well makes the investment case highly attractive,” Chris Weston, the head of research at Pepperstone, wrote in a note on Tuesday, later referring to the risks of an economic slowdown.

A slowdown in the economy is one thing, but investors are also eyeing the possibility that growth slows while inflation continues to run hot, a dire combination known as stagflation.

Stagflation is thought to be an even worse outcome for the economy than a typical recession. That’s because high inflation may prevent the Fed from cutting interest rates to boost growth, as it would in a more run-of-the-mill downturn.

“Concerns over stagflation, which is usually bullish for gold, remain a focus for precious metal market participants. Since 2001, gold has never declined in a scenario where US CPI is above 2% and the Fed is easing monetary policy,” Bank of America strategists wrote in a note on Tuesday.

Interest rate cuts from the Fed are also pushing up the demand for bullion. There are a few reasons: