Yes, Gold is still a good investment in 2025, but with global shifts underway, is now the moment to buy or wait?
For more than a year, gold prices have been breaking one price record after another and are currently toying with the idea of climbing above $3,150. This has sparked the debate of whether it has peaked and if now is the time to buy the precious metal.
Looking at the gold price chart, you will realize that since the clean bullish reversal of September 2023, the precious metal hasn’t held back. Its price action has remained impressively strong as it tore one historical high after another.
You will also note that its dips have been shallow and short-lived and rebounds swift and decisive. This explains the 7% gains in the last 30 days, 34.6% in the last 12 months, as well as the 91.4% gains over the last 5 years.
At the time of writing, the precious metal is trading around $3,230 per troy ounce, less than $15 from the historic price of $3,245 set a few days ago.
But what makes gold a gold investment right now? We look at the top four reasons to stay bullish on gold even at the current ‘peak’ prices.
Geopolitical and global tensions will continue driving gold prices up
Gold has proved to be the ultimate safe haven asset. It thrives in periods of heightened global tensions and geopolitical crisis. Today, there are multiple ongoing conflicts around the world that continue to drive up gold prices.
Top among them are the conflicts in Eastern Europe and the Middle East as well as the escalating US-China trade frictions.
Institutional and central banks are still buying
Institutional investors are accumulating gold at record rates, and so should you. For example, major players in the finance industry like BlackRock and State Street have increased gold allocations in recent quarters. Central banks have also embarked on an unprecedented gold buying spree over the last few years.
Chinese, Russian, and Indian central banks, for example, have collectively bought and added to hundreds of tons of the yellow stone to their reserves. When the biggest financial institutions in the world are hoarding gold, it’s a signal retail investors shouldn’t ignore.
Weakening US Dollar and rate cut expectations are a bullish signal
Inflation has been cooling and as a result, the FED have promised at least two rate cuts before the end of this year. It is also worth pointing out that the US Dollar has been losing steam.
These two are some of the clearest bullish buy signals for gold because a weak US Dollar makes gold cheaper, especially to the international market. Lower interest rates also mean low ROI for treasuries and savings.
Buy to hedge against inflation
Even though inflation has slowed, the risk of a resurgence remains high. In fact, the fear of recession is one of the top factors driving gold prices up after Trump effused to rule out economic trouble that could result in recession in the near future.
This has led analysts to raise their recession forecasts for the year, with the likes of Goldman Sachs raising the odds of a recession to 45%.
Note that gold has always been one of the most effective hedges against inflation and economic downturns.
By investing in the precious metal today, you get to preserve your wealth when the value of cash and stocks crashes.
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