Historical bull markets show that once a rally gains momentum, it often lasts longer than most investors expect, and current conditions suggest we could be in the early innings of a major run.
Gold’s rally this year has been nothing short of historic. On October 14, 2025, gold reached a new record of $4,179.48 an ounce, a milestone for investors watching the metal’s historic run. The yellow metal is up more than 57% year-to-date, as investors, central banks, and institutions piled into an asset that has long been considered the ultimate safe-haven. Gold’s historic price rise has been fueled by a mix of factors: renewed trade tensions between the U.S. and China, expectations of further rate cuts from the Federal Reserve, and record levels of gold purchases by central banks.
Bank of America has lifted its gold price forecast for 2026 to $5,000 per ounce. Analysts at Société Générale also expect gold to reach $5,000 an ounce by late 2026, noting that ETF inflows have exceeded even their most optimistic forecasts. Leading gold-related stocks like Newmont (NEM), AngloGold Ashanti (AU), Coeur Mining (CDE), and Royal Gold (RGLD) have rallied 50% to 266% year to date, tracking the yellow metal’s historic run.
Source: Yahoo Finance
The irony is that gold’s rally has occurred even as the stock market remains near record highs. Normally, gold thrives when stocks fall. But this cycle is different. Investors seem to be treating gold not merely as insurance against a market crash but as protection against policy volatility itself. That’s why analysts at MarketWatch have argued that gold’s surge shows it’s now “more than just a hedge for the stock market’s record run.”
So, what’s behind the run-up?
Even a few months ago, gold at $4,000 seemed far-fetched. It traded around $3,500 in late summer before an unusually sharp run began. Since then, gold has gained more than $500 in just 36 days, marking one of the sharpest short-term moves in decades. For context, it took gold an average of 1,036 days to achieve its previous $500-increment milestones.
Source: Gold.org
The speed of this rally has caught even seasoned analysts off guard. Société Générale’s commodity desk, which had set a bullish $4,318 target for the fourth quarter of 2026 just a month ago, was forced to revise its outlook upward after gold broke through its forecast almost two years ahead of schedule. The French bank now sees $5,000 by the end of next year, citing stronger-than-expected ETF inflows and resilient central-bank demand.
ETF flows indeed have acted as one of the strongest tailwinds for gold. Global gold ETFs added roughly 23 tonnes in the past week and nearly 100 tonnes in the last month, according to the bank’s latest note. We rarely see that kind of buying pressure, especially when the price level is already quite high. It shows that institutional and retail investors alike are viewing gold as a hedge against a rising list of uncertainties from politics and trade to currencies and policy credibility.
Source: Gold.org
The safe-haven rush
Investment demand aside, the immediate trigger for the latest breakout came from Washington. President Donald Trump’s decision to impose 100% tariffs on Chinese imports and restrict exports of key software triggered fears of a renewed trade war. China quickly promised “countermeasures,” sending markets into a risk-off mode.
By Friday, investors were rotating out of equities and into traditional safety plays like Treasuries, the yen, and most notably, gold. When Trump tried to dial back the tension with his typical reversal (“Don’t worry about China, it will all be fine!”), traders didn’t seem quite reassured as the damage to confidence was already done.
At the same time, the Federal Reserve has turned more dovish, with markets pricing in two additional 25-basis-point rate cuts this year, one in October and another in December. Lower yields make non-income-producing assets like gold relatively more attractive. Combined with slower growth, a weaker dollar, and ongoing geopolitical noise, that’s been enough to push global demand to levels not seen since the 1970s.
According to Nemo.money’s chief market analyst, Han Tan, “Renewed concerns over a global trade war have pushed gold above the psychological $4,100 level.” The metal’s appeal has broadened beyond the typical inflation-hedge argument to become a hedge against policy unpredictability itself.
Meanwhile, central banks keep buying gold
While ETF investors have helped accelerate the rally, the foundation for gold’s long-term strength was laid by central banks. Net purchases have exceeded 1,000 tonnes annually from 2022 through 2024, more than double the pace of the previous decade. That buying accounts for roughly 20% of total physical demand, a scale we haven’t seen in recent decades.
Much of this demand comes from emerging markets diversifying away from the U.S. dollar and U.S. Treasuries. The trend gained traction after Russia’s reserves were frozen in 2022 following its invasion of Ukraine, which served as a wake-up call for countries holding large dollar assets. As Invesco’s Paul Syms put it, “Central bank buying of gold has increased, particularly following the start of the Russia-Ukraine conflict, which saw a shift in reserve allocation away from the U.S. dollar.”
This year, those purchases have continued unabated. Even countries traditionally aligned with Western economies have been adding to their holdings, citing both diversification and strategic autonomy. The sustained official-sector demand has also helped underpin market confidence that the rally has more than merely speculative momentum behind it.
Uncertainty and credibility
The other major theme driving gold is a growing sense of unease about economic governance and policy credibility. The U.S. government shutdown, now in its second week, was one of the initial sparks that sent gold past $3,900 earlier this month. While shutdowns are not unusual in Washington, this one came amid an already tense political environment and questions about fiscal sustainability.
Add to that a Fed that’s been under constant political pressure, and you get a cocktail of uncertainty investors hate. As Tom Bailey of HANetf noted, “The surge in gold prices since around 2022 is less about short-term speculation and more about the potential upending of the global monetary and macro landscape.”
Too far, too fast?
Despite the strong narrative, not everyone believes gold can keep rising in a straight line. Technical indicators are showing some signs of warning. The metal’s RSI is above 90, and prices are more than 20% above their 200-day average, suggesting an overbought market that could be due for a pullback.
Strategic investors whose gold allocations have hit their target weights may start rebalancing, locking in profits after an extraordinary run. Some analysts also warn that tighter credit conditions or a sharp dollar rebound could lead to a short-term liquidation in gold, particularly from leveraged funds.
In addition, consumer demand, especially in Asia, is also showing signs of fatigue. At these price levels, jewelry buying tends to decline, reducing one of the key sources of physical demand. “The pace at which gold prices have risen is remarkable,” said Deutsche Bank’s Jim Reid. “But a rally this steep rarely goes uninterrupted.”
Will the bull run continue? Past cycles hint that gold’s rally may be far from over
Despite the current meteoric rise of gold, the current rally is only 735 days old, compared to an average of 1,062 days for major historical bull markets. If past cycles are any guide, this move may still have room to run. The metal’s performance this year has already drawn comparisons to the late 1970s, when inflation and policy uncertainty drove an explosive multi-year rally that ultimately reshaped global asset allocation.
Source: Gold.org
What’s different today is the diversity of buyers: from institutions and retail traders to governments and ETFs, demand is coming from nearly every corner of the market. So, the story right now is not only about inflation or interest rates. We live in an era where investors are questioning fiat currencies, policy consistency, and global leadership, and all these factors have helped gold re-emerge as a simple, tangible anchor. As central banks are still buying, investor sentiment has turned positive, and with rate cuts likely, the backdrop for gold remains supportive.
Now the question isn’t whether gold is expensive; it’s whether there’s a credible alternative.