GOLD RUSH

The precious metal has been on a historic run, and analysts say it has more legs

- Angela Tan Senior Business Correspondent

Gold keeps defying expectations. Its price has broken a series of record highs in 2025 as investors turn to the safe asset in times of market uncertainty.

The price of the precious metal has risen sharply over the past two years in an increasingly fragmented world beset by Russia's invasion of Ukraine, the Gaza war and risks from US President Donald Trump's trade war.

Investors who are mistrustful of governments turn to the commodity in a flight to safety.

In the past year alone, the spot gold price has risen 40 per cent. It broke past US$3,700 per ounce for the first time in September.

This has turned the bullion into one of the star performers so far in 2025, beating even Bitcoin, which is known for logging big rapid jumps in prices when on a run.

But will gold continue its winning streak, or is the market primed for a sharp pullback?

SAFE HAVEN

For centuries, gold has been the go-to asset in times of political and economic upheavals because it holds its value over a long period of time, and can be sold anywhere.

"Whenever there's a lot of uncertainty, traders temporarily park their money in gold. When there's clarity, gold prices tend to drop again because traders know what to do with their money," says Ms Lina Thomas, analyst at Goldman Sachs Research.

It is also seen as a hedge against inflation when the purchasing power of currencies is eroded. In 2025, inflation worries have escalated as Mr Trump imposed import duties on goods entering the US, a move which threatens to spike prices across the global economy.

US inflation is also in the spotlight as Mr Trump piles pressure on the US Federal Reserve to lower interest rates.

On Sept 17, the US Federal Reserve delivered its first rate cut since December and opened the door to further easing.