• Monetary Policy Catalyst: The U.S. Federal Reserve's 25-basis-point rate cut to 4-4.25% weakened the dollar and lowered the opportunity cost of holding gold
• Central Bank Demand: Emerging market central banks, led by China and India, are projected to buy 900 tonnes of gold in 2025, tightening supply and driving prices
• Geopolitical and Economic Uncertainty: Escalating U.S.-China trade tensions and persistent inflation fears have bolstered gold’s safe-haven appeal

Harare- Gold has etched its name in the annals of financial history, surging past $3,700 per troy ounce on September 17, 2025, to reach a record $3,707.34, with prices climbing further to $3,723.21 as of today, reflecting 41.76% year-to-date gain.

This unprecedented rally, which has seen gold shatter psychological barriers with ease, is not merely a numerical milestone but a reflection of profound shifts in global markets. Driven by a potent mix of monetary policy pivots, geopolitical instability, and central bank demand, gold’s ascent signals a flight to safety in an era of eroding trust in fiat currencies.

The immediate spark for gold’s breach of $3,700 came from the U.S. Federal Reserve’s September 16-17 meeting, where it cut the federal funds rate by 25 basis points to 4-4.25%, marking the first reduction of 2025.

This dovish shift, anticipated after softer consumer price index data and weakening jobs reports, lowered the opportunity cost of holding non-yielding assets like gold while weakening the U.S. dollar, which hit a year-to-date low of 96.56 on September 16.

The dollar index’s 2% decline over the past month has amplified gold’s inverse correlation with the greenback, making it more affordable for international buyers.

Meanwhile, bond market volatility marked by a brief spike in U.S. Treasury yields in early September followed by a decline has pushed investors toward gold as real yields on 10-year Treasuries hover near multi-month lows, reinforcing bullish momentum.

Central banks have emerged as a cornerstone of this rally, with their relentless gold purchases reshaping market dynamics. In 2025, global central banks are on track to acquire around 900 tonnes, following three consecutive years of exceeding 1,000 tonnes annually, a structural shift away from dollar-denominated reserves.

Emerging market giants like China and India are leading the charge, hedging against U.S. policy risks and currency de-dollarisation trends, as evidenced by the U.S. dollar’s share in global reserves dipping to 57.8% by late 2024. This insatiable demand has tightened physical supply, with refiners and miners struggling to keep pace, pushing prices higher.

Goldman Sachs notes this “stronger-than-expected” central bank buying as a key driver, forecasting sustained purchases through 2026, further constricting the market.

Geopolitical and trade tensions have poured fuel on the fire, amplifying gold’s safe-haven appeal. The rekindling of U.S.-China trade wars, sparked by President Trump’s “Liberation Day” tariffs in April 2025, has heightened fears of stagflation and supply chain disruptions, driving investors to gold as a neutral store of value.

Ongoing conflicts in Ukraine and the Middle East, alongside shifting global alliances, have deepened this flight to safety. Retail and institutional investors have followed suit, piling into gold exchange-traded funds (ETFs), with holdings reaching levels unseen since September 2023. Combined with surging over-the-counter (OTC) trading, these inflows have created a self-reinforcing cycle of demand, propelling prices to new heights.

Inflation and recession fears have further cemented gold’s allure. With U.S. core CPI projected at 3.1% for 2025 and economic indicators like softening nonfarm payrolls signalling potential recession, confidence in equities and bonds has waned.

Gold, historically a hedge against inflation, has outperformed major asset classes, with the World Gold Council noting its 26% gain in the first half of 2025 amid “highly uncertain geoeconomic” conditions. This performance show gold’s role as a portfolio stabilizer in turbulent times, with investors increasingly viewing it as a bulwark against both inflationary pressures and economic slowdown.

Historically, gold’s journey to $3,700 mirrors past bull runs but stands out for its intensity. Fixed at $35 per ounce under Bretton Woods until 1971, gold soared to $850 in 1980 (~$3,200 in 2025 dollars) amid stagflation and oil shocks.

The 1980s-1990s saw a bear market, with prices dipping below $300 as high interest rates strengthened the dollar. The 2000s revived gold’s fortunes, climbing from $250 to $1,900 by 2011—a 660% gain fuelled by the dot-com bust, 9/11, and the 2008 financial crisis.

After a decade of consolidation, the COVID-19 pandemic pushed gold past $2,000 in 2020, and by 2024, it had notched 40 new all-time highs, crossing $2,900 in February 2025 before accelerating to today’s levels.

This 41% YTD surge dwarfs the 32% gain of early 2020, driven by modern catalysts like de-globalisation, digital asset competition, and algorithmic trading volatility.

Technically, gold’s chart radiates bullish momentum.

Since the August 29 low of $3,404, prices have formed a steeper ascending channel, with $3,500 acting as a critical support level tested multiple times. The breakout above $3,600 on September 5 confirmed a bull flag pattern, targeting $3,700 and beyond, while RSI on hourly charts has rebounded from oversold levels, suggesting room for further gains.

Fundamentally, supply constraints are stark: annual mine production of 2,500-3,500 tonnes falls short of demand (710 tonnes/quarter from central banks and investors). While recycling may increase with high prices, consumer demand in price-sensitive markets like India and China could soften, posing a counterbalance.

Risks linger, however, with a potential hawkish Fed surprise or dollar rebound threatening profit-taking, as seen in the brief dip to $3,669 on September 9 after an intraday high of $3,715.

Looking ahead, gold’s trajectory points to further gains. Goldman Sachs, having raised its end-2025 target to $3,700 (already surpassed), sees $4,000 by mid-2026, with a potential spike to $5,000 if Fed independence falters, prompting a Treasury-to-gold shift. J.P. Morgan forecasts $3,675 by Q4 2025, climbing to $4,000 by mid-2026, driven by sustained central bank buying.

Long-term projections from LiteFinance and InvestingHaven eye $3,800-$4,200 by 2026, potentially reaching $5,155 by 2030 if inflation and Euro strength persist.

Bearish voices, like LongForecast, predict a September close at $3,170 amid volatility, but upside risks dominate. For investors, gold’s breach of $3,700 shows its enduring role as a portfolio diversifier (5-10% allocation recommended) and tactical play. In an era of uncertainty, gold isn’t just shining it’s redefining resilience.

 Equity Axis News