On April 22, 2025, the spot price for a troy ounce of gold surpassed the $3,498.69 mark or €3,034.99 in the early morning hours for the first time, exceeding the previous day’s high by almost $70. This all-time high is far more than a statistical outlier: it is a visible expression of a new gold super-trend driven by multiple forces.

Why is Gold Soaring to New Heights?

The recent price jump has several interconnected causes. Firstly, the trade conflict between the US and China is escalating again after President Trump announced potential additional tariffs while simultaneously attacking the Federal Reserve for allegedly overly restrictive monetary policy. Such power-political skirmishes increase the perceived tail risk in the global economy – a classic breeding ground for the “safe haven” gold.

In parallel, central banks have been buying at an unprecedented pace since 2022: Russia, China, and several emerging countries have already increased their reserves by around 710 tons in the first quarter of 2025, according to JP Morgan. This structural demand removes physical metal from the market and creates a stable floor.

The technical component should not be underestimated. The breakthrough above $3,300 on April 16 and $3,400 on April 21 triggered a wave of algorithmic buying programs. On April 21 alone, over 615,000 gold futures contracts were traded according to the CME Group – four times that of a normal day. The subsequent short squeeze accelerated the movement, while robust physical demand from China and India – fueled by tax relief for gold jewelry and upcoming elections – quickly absorbed any pullbacks.

Supply Remains Tight

On the supply side, additional price drivers are lurking. Major projects such as Newmont’s Ahafo North expansion in Ghana or Barrick’s binational Pascua-Lama project on the Argentina-Chile border are delayed by at least a year due to rising financing costs and tightened ESG requirements. At the same time, global recycling supplies remain at about 1,120 tons according to the World Gold Council – about ten percent below the ten-year average – as many private households are hoarding rather than selling their old gold in view of the price rally.

Outlook Until 2026

Investment banks are therefore adjusting their forecasts upward. JP Morgan sees the gold price in the range of $3,675 by the end of 2025 and considers exceeding the $4,000 mark in the second quarter of 2026 realistic, provided global growth remains weak and central banks continue to buy. Goldman Sachs rates $3,800 as a base scenario but cites $4,500 as a potential extreme target if geopolitical tensions escalate and real interest rates remain deep in negative territory.

Risks in Focus

Nevertheless, the rally is not without risks. An abrupt rise in real US interest rates, for example through surprisingly rapid inflation cooling or additional Fed tightening, could stop the ascent. A stronger US dollar would dampen the gold price in other currencies, and a decline in central bank purchases – for instance, due to a strategic reallocation of Chinese foreign exchange reserves – would reduce the structural tailwind.

Opportunities for Investors

For investors, these conditions present attractive leverage opportunities. Well-capitalized producers with All-in Sustaining Costs significantly below $1,300 – such as Agnico Eagle, Lundin Gold or the Australian Northern Star – could disproportionately expand their margins. Royalty and streaming companies like Franco-Nevada or Sandstorm Gold offer inflation-protected cash flows without operational mine risk. Those seeking maximum security can store physical gold VAT-free in Swiss bonded warehouses or rely on physically backed ETCs such as Xetra-Gold and Euwax Gold II.

Conclusion

Scratching the $3,500 threshold marks not an endpoint, but the beginning of a new price region that seemed hardly imaginable a few years ago. Geopolitical uncertainty, sustained central bank demand, and negative real interest rates form a solid foundation on which the gold price can continue to build. Short-term corrections remain likely, but strategically oriented investors should keep an eye on quality producers and royalty platforms and use physical gold as insurance against the uncertainties of financial markets. Those who navigate this environment correctly could be the first to experience the jump over 4,000 US dollars as the next historic milestone.