Gold is up more than 40% in 2025, on pace for its best year since 1979-amtomessage

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2025-09-22

Gold is up more than 40% in 2025, on pace for its best year since 1979

Gold (GC=F) prices rose to a new record on Monday, putting the precious metal on pace for its largest annual gain in more than 45 years.

Gold futures surged to around $3,750, while bullion for immediate delivery traded above $3,700 per ounce.

The precious metal is up more than 40% year-to-date, marking its best year since 1979, according to research compiled by Carson Group.

Gold’s monster run this year has been partly driven by expectations of a Fed easing cycle, which started last week when policy makers cut interest rates by 25 basis points and signaled two more reductions in 2025.

A weaker dollar has also powered gold, which is priced in US currency. The dollar index (DX-Y.NYB), which measures the greenback against a basket of currencies, is down roughly 10% year-to-date.

Inflows into physically backed exchange-traded funds (ETFs) hit a three-year high while central banks have kept accumulating their holdings of the precious metal.

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“We see it really driven by central banks from around the world — particularly those in emerging markets, and of those markets, Russia and China and India — buying gold to hedge their currencies versus the dollar,” John Stoltzfus, Oppenheimer chief investment strategist, told Yahoo Finance. “And when they buy, they buy in size.”

The precious metal has far outperformed the S&P 500 (^GSPC) and even bitcoin (BTC-USD), up 13% and 20%, respectively, during the same period.

A September Bank of America fund managers survey released last week showed that gold moved up to the number two spot of most crowded trades, just behind the ‘Magnificent 7’ stocks.

Still, when asked about their allocation to gold, 39% of fund managers surveyed said their current gold position is closest to 0%. The weighted average allocation among all of the ones who participated in the survey was just 2.3%.

Earlier this month, Goldman Sachs analysts noted gold’s breakout reflects “conviction buyers stepping up purchases”, including ETF holdings, stronger speculative positioning, and reaccelerating demand from central banks after a seasonal summer lull.

The firm reiterated its price target of $4,000 per troy ounce by mid-2026.