Gold hits record $3,500 per ounce on central bank buying and geopolitical tensions

Gold surged past $3,500 per ounce for the first time in history on July 23, 2025, marking a pivotal moment in the precious metal’s 2025 rally [1]. This milestone capped a year of robust performance, with annual returns hitting 43% and outpacing most major asset classes [1]. The upward momentum was driven by a combination of factors, including central banks’ ongoing gold-buying spree, rising trade tensions, and expectations of Federal Reserve rate cuts [3].

The rally continued into late July and early August, with gold prices hitting two-week highs amid renewed geopolitical pressures and shifting global trade dynamics [2]. By mid-August, prices held below $3,400 due to recent U.S. tariff announcements and trade friction concerns [4], though analysts remained optimistic about gold’s long-term trajectory. “Gold has demonstrated its role as a safe-haven asset in times of economic and political uncertainty,” noted analysts, adding that structural trends such as central bank purchases and inflationary pressures continue to support bullion [3].

The surge in gold prices has also attracted the attention of Wall Street, with money managers increasing their bullish bets to a seven-month high as of July 22 [5]. Analysts point to the fact that gold’s tariff-exempt status and its growing appeal as a strategic reserve asset are reinforcing its role in diversified portfolios [5]. Additionally, the weakening U.S. dollar, sticky inflation, and potential interest rate cuts are seen as tailwinds for gold’s continued ascent [5].

Amid the broader gold rally, individual stocks in the mining sector have also gained momentum. Caledonia Mining (CMCL) has emerged as a standout performer, with its stock surging over 147% year to date [5]. The company, which operates the high-grade Blanket Mine in Zimbabwe, reported record production in Q2, pushing total output for the first half of 2025 to 39,741 ounces [5]. Analysts, including those at Maxim Group, have raised their price targets for CMCL, with a “Buy” rating reaffirmed based on the company’s strong operational performance and production guidance [5].

The broader market environment has also supported the rally. U.S. gold futures reached as high as $3,500 on July 23 before retreating slightly, while spot prices continued to show resilience despite some consolidation [5]. The dollar index weakened during the period, reinforcing gold’s appeal as an alternative store of value [5]. Meanwhile, geopolitical tensions and ongoing central bank activity have provided further underpinning for the metal’s strength [2].

While some analysts have speculated that gold could potentially reach as high as $9,000 in the long term [6], current market conditions and near-term data suggest that the rally remains firmly rooted in tangible fundamentals rather than speculative hype [5]. Central bank buying alone has already accounted for a significant portion of the increase, with many institutions planning to expand their gold holdings in the coming year [3].

The combination of geopolitical instability, monetary policy shifts, and strong institutional demand has created a favorable backdrop for gold. As the year progresses, market participants will closely watch how these factors evolve, particularly as the U.S. and other major economies navigate ongoing trade discussions and inflationary pressures [4]. For now, gold’s record-breaking climb continues to highlight its enduring appeal in an increasingly uncertain global economy [1].

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Source:

[1] Cryptopolitan (https://www.cryptopolitan.com/gold-3500-first-time-stocks-dollar-surge/)

[2] KITCO (https://www.kitco.com/news/article/2025-08-07/gold-silver-gain-central-banks-buying-gold-bullish-charts)

[3] Barchart.com (https://www.barchart.com/story/news/33922509/wall-street-is-betting-big-on-new-record-gold-prices-here-is-the-top-rated-stock-to-buy)

[4] Mitrade (https://www.mitrade.com/insights/news/live-news/article-2-1021018-20250807)

[6] GoldSilver (https://goldsilver.com/industry-news/article/the-cup-the-handle-and-golds-final-third-phase/)