Gold is US$3000 per ounce – a new record high! But will the rally continue?

Its official – Gold is US$3000 per ounce! This is a new record high for the precious metal in US dollars and is now above A$4,500 because of the weak Aussie dollar. The gold price gained 27% in 2024 and another 13.6% in the first ten weeks of 2025. Why has gold gained and where to next.

Gold is US$3000 per ounce because it is in hot demand

The rally in gold prices is actually not something unique. It is something that always happens in times like these, when investors want a safe haven investment.

And it is a time of economic turmoil right now – no doubt about it. The impact of interest rates rising as fast as they did, then saying high for several months is still being felt. The uncertainty of the impact on Trump’s tariffs is reeling over the economy – they are far higher and applied to more jurisdictions than during Trump’s first term. Don’t forget as well that many countries are reciprocating in a move that’ll decimate global trade.

During times of economic turmoil like these, gold prices rise because investors tend to turn to gold as a safe haven investment. This is because gold has proven to hold its value over time, making it a reliable store of wealth. When stock markets are volatile or currencies lose value, gold can provide stability and security for investors, at least in theory.

Gold is also seen as a hedge against Inflation. Inflation means that the purchasing power of a currency decreases, making it more expensive to buy goods and services. Gold has historically been seen as a hedge against inflation because its value tends to rise when there is high inflation. Investing in gold can help protect your wealth from the effects of inflation.

And of course, gold is used in many uses including jewellery and currency, but also in industrial applications in electronics, dentistry, and medicine. The demand for these industries is expected to grow in the future, driving up the price of gold.

The demand for gold that is driving gold prices higher is not just for physical gold, but other gold investments including gold mining companies, junior developers and explorers (i.e. those small cap companies aiming to be the next big things) and gold ETFs – gold ETFs took in US$9.4bn, the most in 3 years. The largest American gold ETF, iShares GLD, now has $86.6bn in assets, up from $73.2bn at the end of 2024.

Although of course, physical gold is big too – according to the World Gold Council, central banks bought 1,000 metric tonnes in 2024 which makes it the third straight year of buying and double the average annual purchase amount for the prior decade. And leading countries included China, Uzbekistan, Kazakhstan, Poland and India.

Where to next for gold prices?

It is an interesting question. Many analysts forecasted a break through of the $3,000/oz mark eventually…specifically, many assumed 2026 because they thought interest rate cuts would come faster than they are coming now. Goldman Sachs is one such group which forecasted mid-2026 and asserted the factors that led gold to rise in 2024 had disappeared. That prediction looks quite bearish right now.

But we would think it would be difficult to see gold prices retreating (at least not significantly) in the current economic conditions. Of course, things can change very quickly…events can happen that we cannot forsee and fears investors think will be certainties may not eventuate. Ultimately, gold is at all all time high and it doesn’t appear that it’ll retreat any time soon, at least not in current conditions.

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