Gold is having the best year since the 1970s: what’s driving the bizarre rise?

The gold price will experience an unprecedented rise in 2025. The value of the precious metal has already increased by more than 50 percent since January, putting this year on track to be the best since 1979, once again cementing gold’s status as the world’s most valuable and reliable asset. In this comprehensive article, we delve deeper into the reasons behind the historic gold rally we are witnessing this year.

Gold is breaking records and doubling since 2023

According to data from Curvo, gold has more than doubled its value since the beginning of 2023. The price increase means that gold, measured in euros and dollars, is outperforming virtually all other asset classes, including stocks, real estate and even Bitcoin (BTC).

This confirms its reputation as the most valuable asset in the world. Gold is a store of value that has been extremely valuable for thousands of years, regardless of economic cycles or monetary policy changes.

The power of gold is historically deeply rooted. In virtually all periods of humanity, gold served as the foundation for the global financial system. In fact, well into the twentieth century, currencies were directly linked to gold, which guaranteed monetary stability. However, in the 1970s, most countries abandoned this link to create more policy freedom. Since then, the price of gold has fluctuated freely on the market, but its role as a store of value and symbol of security has never actually disappeared.

Back to the present. The market value of gold has increased by a whopping $4.77 trillion in just 45 days. That amount is almost twice as large as Bitcoin’s entire market capitalization, highlighting the scale of the recent inflows into the gold market. With this increase, gold’s total market capitalization has now risen to almost $27 trillion.

Central banks are boosting reserves amid global debt worries

In the last year we have seen gold absorbing more and more liquidity. But what explains this gigantic rise?

There is no simple answer to this. However, there are a number of clear factors that play a role. While initially geopolitical tensions, such as the conflicts in Ukraine and the Middle East, drove up demand, the current rally appears to be increasingly driven by structural concerns about the global debt burden. Particularly in countries such as the United States, Japan and France, government debts are spiraling out of control, which undermines confidence in traditional currencies.

The continued buying urge of central banks underlines this trend. Worldwide, central banks’ gold reserves have now risen to more than 4 trillion euros. This is a growth of 37 percent compared to last year. Countries such as China, India and Turkey have significantly increased their purchases in recent months.

According to economists, they do this to reduce their dependence on the US dollar and better protect themselves against currency instability and sanctions risks.

Renowned economist Peter Schiff warned this week, as we previously wrote, that the unprecedented rise in the gold price may be a harbinger of a broader financial crisis. His analysis suggests that the gold rally is not just a symptom of market optimism, but rather a signal of underlying weakness in the global economy.

“The 2025 gold rally likely points to a coming crisis involving the US dollar and government bonds, which will make the 2008 financial crisis look like a fun school field trip,” the goldbug said.

Gold as the ultimate safety net in a shaky economic climate

In addition to the debt problem, the political situation in the United States also plays a role in the most recent price increase. The American shutdown has put a stop to all political issues within the American government.

The shutdown, which followed political disagreements over budget issues, has pushed investors back toward gold. In times when the global economy is struggling with increasing volatility, gold and other precious metals continue to be preferred over risky investments.

The continued interest in gold shows how, despite thousands of years of significance, the metal has not lost its significance. In fact, at a time when digital assets like Bitcoin are being presented as the “new gold,” the precious metal shows that even Bitcoin doesn’t have to be a worthy competitor.

The combination of geopolitical tensions, rising debt and declining confidence in fiat currencies is creating a ‘perfect storm’ in which gold is once again fulfilling its traditional role: that of ultimate protection against economic uncertainty.

With a price increase of more than 50 percent in 2025 and a doubling since 2023, gold seems to once again set the benchmark for what value really means. In a world that increasingly relies on debt and digital trust, gold remains the symbol of tangible, unchangeable security.