End­less Gold Rally? What’s Driv­ing the Price and What Could Hap­pen Next

Gold has fascinated humanity for thousands of years. Whether as jewelry, ritual object, or currency, the precious metal holds a unique allure. In ancient Egypt, gold was considered the “skin of the gods,” and medieval alchemists desperately sought the philosopher’s stone to turn base metals into gold. Its durability and value stability have made gold one of the most sought-after raw materials.

In modern finance, gold plays a key role—especially as a safe haven in uncertain times. But how can investors today invest in gold? What forms of gold investment exist? And what are the associated opportunities and risks?

Gold Rush 2.0?

Before diving into gold investment options, let’s look at the recent price developments. Gold had an outstanding year in 2024, rising over 27%—its strongest increase since 2010. The gold price hit an all-time high 40 times last year. And the rally continues in 2025: on October 7, 2025, gold surpassed $4,000 per ounce for the first time during trading and is up over 51% year-to-date.

What’s Driving This Trend?

Why is gold still so popular? As often, multiple factors are at play. Gold is currently benefiting from expectations of interest rate cuts. Since gold doesn’t yield ongoing returns like interest or dividends, it becomes more attractive when other investments, such as bonds, offer lower yields. Another driver is the weakening U.S. dollar. Since gold is traded globally in dollars, a weaker dollar makes it cheaper for investors outside the U.S., boosting demand. Compared to the euro, the dollar has already depreciated by over 12% this year. Ongoing geopolitical uncertainties also play a role. In uncertain times, many investors seek a “safe haven”—and increasingly turn to gold.

Although the market is technically considered overbought—meaning the price has risen sharply in a short time and a correction would normally be expected—the upward trend remains unbroken. Traditional warning signs are being overshadowed by strong momentum, the tendency for current price movements to continue.

Institutional demand is also important: central banks—especially China and some emerging markets—are increasing their gold reserves while reducing their holdings of U.S. Treasuries. Their goal is to become less dependent on the U.S. dollar and diversify their reserves. Additionally, supply bottlenecks, such as temporary mine closures, are tightening supply and supporting prices.

It’s also notable that gold is increasingly seen as a strategic store of value, not just a short-term hedge. Many investors now hold gold as a permanent part of their portfolio—similar to real estate or stocks—to protect against long-term value loss.

All these factors contribute to a broad-based gold rally that shows no signs of fatigue.

Still, physical gold investments are not without risk. Several factors can negatively impact the gold price, including rising interest rates, a strengthening U.S. dollar, or economic recovery and reduced geopolitical risks, which make gold less attractive to investors.

Physical or Virtual?

How can investors participate in gold’s value development? Gold investments generally fall into two categories:

• Direct purchase of physical gold
• Indirect investment via financial products like certificates or shares in gold mining companies

Both options have pros and cons that must be weighed.

Conclusion for Investors

Gold can be an important part of a balanced portfolio—both for diversification and return potential. The right gold investment depends on an investor’s individual risk tolerance and strategy. Funds or gold ETFs/ETCs offer a flexible way to participate in gold price movements.