What’s Behind Gold’s Meteoric Rise?

The price of gold has risen nearly 30% year to date. It even surpassed the US$5,500 mark for the first time in history, before falling by more than 15%. At the time of writing, the price of gold was US$5,000 per ounce. However, beyond this recent spike and correction, it’s fair to question why gold is trading at such exceptionally high levels. The two key reasons are massive purchases by central banks and the economic and political climate in the United States, both of which are driving up gold prices.

When episodes of severe tensions are added to the mix, such as those related to reciprocal tariffs, Iran, Venezuela, or even Greenland, we see sharp, temporary spikes. Finally, gold’s impressive performance is also attracting more speculative investors, pushing prices even higher and exposing gold to a greater risk of a sharp correction.

Current market volatility makes it difficult to accurately predict where gold will end the year. Nonetheless, central bank purchases and continued unpredictability in the United States are putting constant upward pressure on gold prices. In addition, more periods of acute tension, including armed conflict, a new round of tariffs, and the US mid‑term elections, are expected in the coming months. Some of these unpredictable events will likely drive up the price of gold.