Gold in 2025: Record-Breaking Prices, Hungry Central Banks and the Dawn of Digital Bullion. How did an ancient store-of-value turn into one of the world’s fastest-moving asset classes?

How did an ancient store-of-value turn into one of the world’s fastest-moving asset classes?

1. Price action: soaring highs, choppy floors

Gold cleared US $3 400/oz in April and still hovers above US $3 300/oz despite June’s pull-backs, leaving the metal up more than 60 % since the start of 2024. Record prints have been fuelled by:

• Tariff-led inflation fears as Washington and Beijing trade barbs again.

• A weakening dollar—the greenback is on track for its worst first-half since the 1970s.

• Deeply negative real yields once US policy-rate cuts were repriced into 2025.

Short-term volatility remains elevated: spot swings of ±US $40 in a single London trading session are now routine.

2. Central banks: still buying hand over fist

Official-sector appetite has not cooled. Net purchases hit 244 t in Q1 2025, comfortably above the five-year quarterly average. Poland led with 49 t, while China, Kazakhstan and India kept adding. A separate WGC survey shows 95 % of reserve managers expect more buying this year, underscoring gold’s role as a sanctions-proof reserve.

3. Investors: ETF flows roar back

ETF inflows rebounded 170 % y/y to 552 t, the strongest quarter since 2022. Retail bar-and-coin demand has softened a touch, but professional flows more than offset it, mirroring the 2020 pandemic pattern.

4. Supply: mines rise, recycling stalls

Despite record prices, global mine output set a Q1 record at 856 t, pushing total supply 1 % higher. Recycling unexpectedly fell 1 % as households held on to jewellery, betting on higher prices ahead. Cost pressures bite: industry all-in sustaining costs closed 2024 at US $1 438/oz, a fresh high.

5. ESG shifts: “green” gold gains ground

Major royalty house Franco-Nevada grabbed Sustainalytics’ Top-Rated Gold Company badge for 2025, while MSCI upgraded it to “AA”. Similar ratings pressure is spreading down the supply chain, nudging miners to publish Scope 3 targets and adopt blockchain-based provenance tools.

6. Digital gold: tokenisation takes centre stage

Tokenised real-world assets (RWAs) on public chains have ballooned past US $24 bn, with gold-backed tokens the largest single slice. An Acuiti survey released in mid-June found a majority of traditional institutions now exploring tokenised gold derivatives as collateral and settlement assets.

7. Geopolitics: repatriation and de-dollarisation

Rising mistrust of U.S. policy has prompted politicians in Germany and Italy to call for repatriating nearly US $245 bn of bullion from the New York Fed vaults. Meanwhile, China is expanding CIPS and the mBridge cross-border CBDC pilot, seeking a payments rail outside the dollar system.

8. Outlook: what could move the metal next?

• Macro policy – A faster-than-expected Fed easing cycle or fresh tariff shocks could ignite another leg higher.

• Central bank cadence – Watch whether Polish and Chinese buying remains above trend into H2.

• ETF stickiness – If real rates stay negative, passive flows may keep the floor near US $3 200.

• Digital adoption – A spot-settled tokenised gold contract on a major U.S. venue would broaden the demand base.

In short, 2025’s gold market is defined by record prices, official sector hoarding and the fusion of bullion with bytes. Unless trade tensions cool decisively and real yields rise meaningfully, the path of least resistance still points north.