Central Banks and Long-Term Investors Drive Gold’s Rally to Record Highs

Gold prices have surged more than 25% in 2025, trading NEAR $3,300–$3,400 per ounce. This upward trajectory is fueled by structural demand from central banks and institutional investors rather than speculative trading. Central banks alone added 244 tonnes in Q1 2025, while gold ETF inflows doubled year-on-year to 552 tonnes.

The World Gold Council reports 95% of reserve managers plan to increase gold holdings—a significant jump from 81% in 2024. Three consecutive years of 1,000+ tonne annual purchases have reset market dynamics, with Goldman Sachs forecasting $3,700 by December 2025 and $4,000 by mid-2026.

UBS projects 2025 demand could reach 600 tonnes, the highest since 2011. This institutional accumulation coincides with a broader shift away from dollar reserves—76% of central banks plan to reduce USD exposure.