The dollar price of gold has increased by around 46% from the start of 2025, making it one of the highest-performing asset classes this year.
The precious metal started in January at just over the $2,600 USD (£2,080) and hit an all-time high at the end of September of $3,892 (£2,892) – just $108 shy of $4,000 an ounce.
The major move has been driven by a number of factors including fears of national economies being mismanaged by global governments, inflation (the printing of fiat currencies, particularly the dollar) and its accumulation by central banks and governments, particularly the US and China.
Experts say the run is far from over
Many financial experts including Andy Schectman from Miles Franklin Metals have made predictions the dollar price is not stopping from a monumental rise anytime soon as investors and big institutions seem to be running for financial cover by exchanging their fiat currencies, government bonds and treasuries, as of all these paper contracts haemorrhage their value at almost exponential rates.
Gold, as well as silver, platinum and palladium cannot be printed and devalued by successive governments that haven’t dealt with the spiralling financial crisis brought about by their addiction to printing money, therefore making an ideal vehicle for just such a financial strategy.
Schectman commented on a YouTube video that gold could quite easily head northwards of $10,000 an ounce a figure that most would probably gasp at yet is on the more conservative side when compared to other experts out there, some talking of figures closer to £50,000 an ounce – a figure derived from the equation of the estimated total amount of dollars in supply divided by the amount of gold bullion in supply, in other words, mathematically sound.
US government shutdown
There are a multitude of factors that could drive the price to all-time highs in a volatile and often febrile world at the moment, exemplified by the recent shutdown of the US Federal Government due to congressional disputes about public spending.
While US debt needs to be dealt with, this almost certainly will not involve paying it down. More likely, as with past shutdowns, eventual agreement with be reached on a plan to leverage something to be able to borrow more and restructure the debt at a lower interest rate. ‘Twas ever thus.
One way of doing this could be by re-pricing gold bullion stored in the various high-security buildings such as Fort Knox, which is astonishingly still priced at the fixed statutory price of $42.22 per ounce – quite different to its current spot price of around $3,850.
Congress and President Trump can change the statutory price, which would enable them to leverage around a trillion dollars, but in doing so, would potentially see the spot price inflate like it did in 1971 from $35 to $850 per ounce in 1980 – more than 2,000%.
As I have often repeated, I am not a financial adviser and would not deign to give financial advice, but with the likes of J.P Morgan and Goldman Sachs recommending much higher percentages of investment portfolios being taken up with gold and other precious metals, it is definitely the time to do your own research.
NOTE: This piece is the opinion of this columnist and should not under any circumstances be taken as investment advice.
