Gold has once again proven its reputation as the ultimate safe-haven asset, smashing through the $3,500 per ounce mark for the first time in history. This milestone underscores how investor sentiment is shifting amid growing bets on U.S. Federal Reserve interest rate cuts and rising geopolitical and economic uncertainty. Silver has also joined the rally, climbing past $40 an ounce for the first time since 2011.
But what’s fueling this surge? And what does it mean for investors heading into the final quarter of 2025? Let’s break it down.
Why Gold Prices Are Soaring
The sharp rise in gold is primarily driven by expectations of U.S. interest rate cuts. Lower rates reduce the opportunity cost of holding gold, which doesn’t yield interest, making it more attractive compared to bonds and savings.
- Spot Gold: Hit $3,508 per ounce before settling slightly lower.
- Year-to-Date Performance: Gold has risen more than 30% in 2025, making it one of the top-performing commodities this year.
UBS strategist Joni Teves explained that investors are “adding to gold allocations, especially as Fed rate cuts loom.” With softer economic data and heightened geopolitical tensions, gold’s role as a portfolio diversifier has become stronger than ever.