Returns from gold have outperformed other major asset classes in 2025. Banks have been positive on the precious metal and remain so in a backdrop of inflation and geopolitical risks.

Gold has shined as a top performer in 2025. Year-to-date, it has risen by around 10 percent, including more than 7 percent since US President Donald Trump’s inauguration on January 20. On Tuesday this week, it hit an all-time high of over $2,942 per ounce before falling back to under $2,900.

Despite already reaching record levels, many market watchers remain positive on the yellow metal. Goldman Sachs revised its price forecast to $3,100 per ounce by end-2025. UBS also updated its projection, saying it could reach a high of $3,200 this year.

Tariff as Inflation Driver

One of the primary factors for bullishness on gold is the risk of inflation, especially due to Trump’s tariffs.

«Based on Fed models used during Trump 1.0 tariffs, recently announced tariffs are likely to raise US core PCE inflation by 0.7 percent and hurt US GDP by 1.2 percent, if all tariffs are passed on to consumers and US trade partners retaliate by [the] same degree,» according to a report by Standard Chartered, which is overweight on gold and advises investors to buy the dip.

«At an all-time high real value, we have been skeptical and adding gold is not without risk. However, macro risks and a return to Fed easing at some point could still aid gold,» added Citi Wealth in an investment note. «For the past 50 years, the correlation of gold to equity and bond returns over 12 months has been -12 percent. If there was a negative economic shock that was inflationary in nature, gold would very likely outperform.»

Geopolitical Tensions

A second major factor is geopolitical risks given the heightened tensions around the world. Trump, for example, has announced a number of radical ideas including plans to buy Greenland from Denmark, empty Gaza and control the Panama Canal.

«Safe-haven demand for gold […] is set to keep rising as a hedge against sudden geopolitical moves, uncertainty over the US government’s
policies and tensions between America, Europe, China and Russia,» said Mansoor Mohi-uddin, chief economist at Bank of Singapore, in a commentary. «The precious metal is likely to stay strong while world order keeps changing over the next few years.»

DOGE Audit

A potentially noteworthy event for the market is the recent discussions about an audit of the US gold reserve at Fort Knox by Elon Musk’s Department of Government Efficiency (DOGE) after being invited to do so by Republican Senator Rand Paul on social media.

«Surely [the US gold reserve in Fort Knox] is reviewed at least every year?» wrote Musk on X.

«Nope. Let's do it,» replied Paul.