Why gold is shining brighter than ever: Understanding the record highs and its timeless allure
As the world spins through yet another cycle of uncertainty, gold once again reminds us why it has endured. Not merely as metal, but as meaning, a measure not just of wealth, but of faith in something that, unlike economies or empires, truly lasts forever
Gold is the world's most alluring metal, and it has captivated humankind for millennia. From ancient civilisations that adorned themselves with golden treasures to modern-day investors watching market screens, its glimmer has always carried both emotional and economic weight.
But as gold prices soar to record highs, surpassing $3,550 per ounce in 2025, a pressing question emerges: what is driving this surge and how much of this precious metal truly exists in the world?
The price of gold has risen by nearly a third over the past year, reaching an all-time high. The reason is 'uncertainty'. "The one thing financial markets hate is uncertainty, and in such scenarios, gold is usually the go-to asset for traders," said Tim Waterer, chief market analyst at KCM Trade in Australia, in an interview with Al Jazeera.
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The global landscape today is marked by instability. The war in Ukraine, the Gaza genocide, and other such events are pushing the economy and starting trade disputes. US President Donald Trump's tariff policies and attacks on the independence of the Federal Reserve have further stirred the pot.
Kyle Rodda, senior financial market analyst at Capital.com, explained to Al Jazeera how interest rates and currency fluctuations play into this. "If interest rates rise, gold becomes less appealing because I can get more for my money by parking it in an interest-bearing asset. However, if interest rates fall, I get less interest paid to me, making gold relatively more attractive to hold."
Foreign investors holding currencies other than the US dollar have also joined the rush. Since gold is typically denominated in dollars, a weaker greenback makes it cheaper for others to buy, further fuelling demand.
Historical anchor
Gold's current rise isn't without precedent. The modern era of gold pricing began in 1971, when the Bretton Woods system, which tied the metal's value to the US dollar, collapsed. Freed from fixed rates, gold prices fluctuated wildly throughout the 1970s, peaking in 1980 at about $3,300 per ounce in today's value.
The metal's next major rally came amid a crisis: During the 2008 financial meltdown, gold surged from $730 to $1,300 per ounce in two years; by 2011, as the European debt crisis unfolded, it climbed to $1,825. The pandemic in 2020 and subsequent inflation again triggered a rally, with gold breaking new records above $2,900 in early 2025.
If you had invested $100 in gold in 1972, it would have grown to around $4,500 by 2024. The same amount invested in the S&P 500, however, would be worth over $18,500. This comparison highlights gold's dual role: a stabiliser during crises, but a modest performer during growth.
Investors' trust in gold
Gold is a physical asset that can be owned outright, appealing to those who distrust governments and financial institutions. "When your currency is losing value, gold is seen as a good asset to protect against inflation risks because, unlike currencies, gold's supply is more finite in nature and is therefore less prone to price dilution," said Tim Waterer.
This logic has extended beyond individuals to central banks. They collectively hold about one-fifth of all gold ever mined, or around 37,755 tonnes as of 2025. Many have increased their purchases in recent years, particularly in emerging markets seeking to diversify away from the US dollar.
Kyle Rodda observed, "President Trump's trade policy has reduced confidence in holding US assets, especially amongst its strategic adversaries. As a result, those countries holding lots of dollars are using them to buy gold instead as a store of value, pushing up the gold price."
World's gold
According to the World Gold Council, roughly 216,265 tonnes of gold have been mined throughout history. Nearly all of it still exists in some form, owing to gold's indestructibility. If all the gold ever extracted were moulded into a cube, it would measure just 22 metres on each side, a surprisingly small volume for such immense value.
Of this total, jewellery accounts for 97,149 tonnes, about 45% of global reserves, reflecting gold's deep cultural roots. Bars and coins make up 48,634 tonnes (22%), often held by investors and institutions. Central banks hold around 37,755 tonnes (17%), while 32,727 tonnes (15%) are used across industries, including electronics, medicine, and aerospace.
Beyond what is already mined, an estimated 132,110 tonnes remain in untapped ore deposits. With annual mining adding only about 2–3% to global stocks, gold's scarcity is integral to its value.
Who mines the most gold?
China, Australia, and Russia lead global production, with annual outputs of 380.4, 328.7, and 331.1 tonnes, respectively. Each has leveraged technology to sustain production while addressing environmental challenges. Yet, as ore quality declines and extraction costs rise, production growth is expected to plateau.
In 2023, global gold production stood at around 3,500 tonnes. Mining methods, ranging from open-pit and underground mining to placer techniques, have evolved with technology, improving yields and safety. Meanwhile, recycling has emerged as a sustainable supplement, now accounting for about 10% of the annual global supply.
Every discarded smartphone or old piece of jewellery potentially feeds back into this cycle. As recycling expands, it may ease pressure on natural reserves while promoting more ethical sourcing practices.
Psychology of a safe haven
Gold's rise has always been intertwined with human emotion. During economic or political crises, investors flock to it as an anchor of trust. Its physicality, tangible, enduring, and universal, offers comfort when paper currencies waver. This psychological element, as much as economics, drives demand.
Even as inflation cools and interest rates adjust, gold's symbolic role as a hedge against instability persists. Its price, hovering near £3,150 per ounce in 2025, reflects both financial calculation and timeless belief.
The future of gold, like its past, is shaped by a blend of scarcity, innovation, and sentiment. Analysts from JP Morgan predict prices could exceed £2,350 per ounce by the end of 2025, driven by continuing geopolitical tensions and cautious investor behaviour.
"The one thing financial markets hate is uncertainty, and in such scenarios, gold is usually the go-to asset for traders."
However, production may soon level off as reserves decline and costs rise. Technological innovations like automation, advanced processing, and greater recycling could offset this, while sustainable mining practices gain prominence amid global climate commitments.
Emerging trends, such as gold-backed cryptocurrencies, may also reshape the market, merging traditional value with digital accessibility. Meanwhile, environmental and ethical concerns will increasingly define the way the world sources and uses its gold.
The history of gold is one of paradox: a finite resource with infinite fascination and a relic of ancient wealth, and a pillar of modern finance. All over the world, the glow of gold reflects the collective history of trust, turmoil, and timeless value.
As the world spins through yet another cycle of uncertainty, gold once again reminds us why it has endured. Not merely as metal, but as meaning, a measure not just of wealth, but of faith in something that, unlike economies or empires, is truly forever.
