Latest Price Snapshot and Key Drivers

As of early September 2025, spot gold prices have surpassed $3,600 per ounce for the first time, repeatedly hitting new all-time highs with intraday peaks around $3,646. This rally is fueled by weak employment data, renewed expectations for interest rate cuts, and a softer US dollar.

Structural Demand: Central Banks, ETFs, and Asian Buying

In the first half of 2025, gold ETFs saw notable net inflows, and global gold demand in Q2 reached record year-over-year values. Central banks have maintained annual net gold purchases of over 1,000 tons for three consecutive years, a critical driver pushing price averages higher. Rising physical consumption and reserve accumulation in Asian markets have further reinforced this trend.

Inflation and Real Interest Rate Pathways: Two Scenarios

Medium- and long-term growth and inflation expectations ultimately set the trajectory for real interest rates. If potential future growth slows while inflation stays moderate, real interest rates will struggle to remain elevated. This will support gold prices. Conversely, if renewed inflation or doubts about policy credibility arise, gold’s role as a risk hedge will strengthen.

Supply Dynamics: Mining Output and Recycled Gold

Bringing new mining capacity online takes time, and capital expenditures remain limited, so supply lags price increases. While recycled gold responds to price shifts, it cannot fundamentally alter the long-term tight supply-demand balance. If ESG standards tighten, ore grades decline, and extraction costs rise after 2030, supply-side constraints will become even more pronounced.

2050 Outlook: Conservative / Base / Optimistic Scenarios

• Conservative: Global growth remains moderate, inflation is controlled, and central bank gold buying normalizes, with prices in the range from $2,500 to $3,500.
• Base: Real interest rates stay low, and central bank and ETF holdings remain elevated, driving prices to the range from $3,800 to $5,200.
• Optimistic: If policy credibility is undermined and the dollar weakens further, gold could break above $6,000.

Step-by-Step Allocations for Investors

For core allocations, physical gold or gold ETFs are recommended to comprise 5%–15% of a portfolio. For tactical exposure, investors can use options to boost flexibility during major economic releases or spikes in geopolitical risk. More advanced investors may seek excess returns by investing in low-cost, growth-oriented mining equities.

Risk Checklist and Profit-Taking Strategies

If real interest rates rise unexpectedly, the US dollar strengthens, or central bank demand softens, gold may experience a sharp correction. Investors are advised to use trailing stop orders to secure partial gains and reduce leveraged positions before major events.