Gold’s Record-Smashing Surge: Why Wall Street Thinks the Rally Isn’t Over

Gold Price Surge and Market Outlook as of September 24, 2025

New All-Time High: Gold prices hit a historic peak in late September 2025, with futures touching roughly $3,800 per ounce ^[1]. Spot gold briefly traded near $3,790 before settling around the mid-$3,700s ^[2].
Spectacular 2025 Gains: The precious metal has soared over 40% year-to-date, on pace for its best annual performance since the 1970s ^[3] ^[4]. A third of those gains came in just the past month as momentum accelerated leading up to the U.S. Federal Reserve’s latest policy moves ^[5].
Drivers of the Surge: A “perfect storm” of factors is fueling gold’s rally: expectations of further U.S. interest rate cuts, still-elevated inflation keeping real yields low, and surging safe-haven demand amid geopolitical conflicts and market uncertainty ^[6] ^[7]. Investors are flocking to gold as a hedge against economic and political risks.
Wall Street Bullish Forecasts: Major financial institutions see more upside ahead. Goldman Sachs recently reiterated a $4,000/oz price target by mid-2026 ^[8], and UBS now forecasts around $3,900/oz in the coming months ^[9]. Some analysts are even more bullish – Jefferies strategist Christopher Wood argues gold could reach $6,600/oz in the not-too-distant future, roughly 75% above current levels ^[10].
Central Bank Boost: Central banks have been buying gold at a record pace. After a seasonal summer lull, global official gold demand rebounded strongly in Q3, matching post-2022 highs ^[11]. In a bold new twist, Chinais moving to become a custodian of other countries’ gold reserves – a plan that could encourage even more gold accumulation by nations ^[12]. These developments underscore gold’s growing appeal as a strategic reserve asset.
Other Precious Metals Climbing: Gold’s rally is lifting its peers. Silver prices surged above $44/oz, a 14-year high, riding on safe-haven and industrial demand ^[13]. Platinum also hit multi-year highs around $1,480/oz, and palladium saw a bounce to about $1,225/oz, reflecting broad strength in the precious metals sector ^[14].

Gold bars have become one of 2025’s hottest investments as the metal’s price rockets to record levels. Gold is up over 40% this year and recently broke above $3,800 per ounce amid a convergence of bullish factors ^[15] ^[16]. Investors worldwide are piling into the precious metal as both a safe haven and an inflation hedge.

Key Drivers of Gold’s Price Surge

Fed Rate Cuts and Inflation: A major catalyst for gold’s climb has been the shift in U.S. central bank policy toward monetary easing. In September, the Federal Reserve enacted its first interest rate cut of the year (25 basis points) and signaled willingness to cut further in coming months ^[17]. This marked the start of a new rate-cutting cycle, a stark reversal from the tightening of previous years. The mere prospect of lower rates had already buoyed gold for months; when Fed Chair Jerome Powell finally pulled the trigger, gold’s rally kicked into overdrive ^[18]. Lower interest rates reduce the opportunity cost of holding gold, which yields no interest, and tend to put downward pressure on the U.S. dollar – both dynamics make gold more attractive to investors. Indeed, “lower U.S. funding costs”have been fueling the gold boom, noted Ole Hansen, head of commodity strategy at Saxo Bank ^[19].

Importantly, inflation remains a concern even as it has moderated from peak levels. The combination of Fed easing and still-elevated inflation* means real interest rates (nominal rates minus inflation) are expected to fall or stay low. “We think gold prices have further room to rally, as U.S. real interest rates should fall further amid additional Federal Reserve easing and still elevated inflation,” explained Ulrike Hoffmann-Burchardi, chief investment officer at UBS Global Wealth Management ^[20]. In other words, investors anticipate that the Fed’s dovish tilt will outpace any decline in inflation, keeping real yields in negative or low territory – a classic recipe for strong gold prices. A softer U.S. dollar has accompanied these dynamics, strengthening the case for gold. As one market commentary noted, the Fed’s “volatile” policy stance and a weakening dollar are “playing a crucial role in strengthening the asset” ^[21].

Central Bank Demand and China’s Play: Another underappreciated driver is the voracious demand from central banks and other official institutions. Central banks worldwide have been stockpiling gold at the fastest pace in decades, as they diversify reserves away from currencies and seek safe-haven assets. After a brief seasonal dip mid-year, official gold purchases rebounded to about 63 tonnes recently – back to the high average levels seen after 2022, according to a Societe Generale note ^[22]. This robust buying by central banks (led by countries like China, India, and Turkey in recent years) has added a steady floor under gold prices, contributing to the bullish sentiment.

In fact, China itself has introduced a new bullish catalyst: Beijing is pushing to become a custodian of foreign gold reserves. A Bloomberg report revealed that the People’s Bank of China is courting other countries (via the Shanghai Gold Exchange) to store their sovereign gold in China ^[23]. The plan has already drawn interest from at least one Southeast Asian nation. If successful, this move could further entrench China as a powerhouse in the gold market and incentivize more nations to buy gold, since China is offering to safeguard those bullion holdings ^[24]. Analysts say it’s a double boon for gold: it encourages governments to accumulate the metal and signals that the world’s second-largest economy (and a top gold consumer) is making gold a “national financial priority” ^[25]. This unprecedented development, announced just this week, fed directly into gold’s rally by reinforcing expectations of sustained global demand.

Market Jitters and Safe-Haven Flows: Beyond central banks, private investors are also pouring into gold due to a backdrop of mounting financial and geopolitical risks. Stock markets had been booming earlier in the year, but concerns have grown that equities may be “overvalued” or have “risen too far, too fast.” ^[26] ^[27] The S&P 500, for instance, saw a sharp 0.6% drop on September 23rd – its worst day in weeks – after Fed Chair Powell struck a cautious tone on the economy ^[28]. Such volatility and valuation fears have prompted a pivot toward gold as a portfolio stabilizer. As Ole Hansen noted, today’s rally is driven by a “cocktail of investor concerns spanning overvalued equities, Fed independence, and mounting geopolitical risks.” ^[29] In other words, gold is benefiting from a general flight to safety as investors grow uneasy about stretched stock valuations, political meddling in monetary policy, and other uncertainties.

Geopolitical Turmoil Ignites Safe-Haven Demand

Gold has long been seen as the ultimate safe-haven asset during times of geopolitical strife, and 2025 has provided plenty of strife. The ongoing Russia-Ukraine war continues to unsettle investors. In late September, Russia’s defense ministry claimed new military gains in Ukraine (seizing a settlement in the Dnipropetrovsk region), underscoring that the conflict remains volatile ^[30]. Tensions between major powers are also simmering. Notably, NATO issued a stark warning to Russia, vowing to use “all necessary military and non-military tools” to defend its members amid the conflict ^[31]. This backdrop of war and saber-rattling has undeniably “deepened geopolitical uncertainty,”which in turn boosts demand for gold ^[32]. As one Reuters report put it, gold’s latest record run has been “buoyed by deepening geopolitical tensions” and “mounting concerns” about global stability ^[33].

Investors are also grappling with political uncertainty in the U.S. itself, which indirectly benefits gold. Following the 2024 elections, President Donald Trump returned to the White House in 2025, bringing an unpredictable policy style. He has openly advocated for lower interest rates and even mused about the Federal Reserve needing to be more accommodative ^[34]. This unusual pressure from the administration – effectively pushing for easier money – has raised some eyebrows about Fed independence and future inflation. It’s another layer of uncertainty that makes gold’s stability appealing. Ross Norman, an independent analyst, noted that dovish voices like new Fed Governor Stephen Miran (who called for aggressive cuts) “heighten the expectation of greater rate cuts, as it seems the U.S. administration is keen to push this – and this is a gold-positive outcome.” ^[35] ^[36] In essence, geopolitical and policy risks are dovetailing: a turbulent world and unorthodox politics are reinforcing the “fear trade” into gold.

Meanwhile, fears of inflation haven’t vanished on the geopolitical stage either. Energy prices spiked earlier in the year amid Middle East tensions and supply cuts by major oil producers, contributing to lingering inflation anxiety. That, combined with the war and global trade frictions, has some investors worried about stagflationary scenarios (high inflation and slow growth). Gold thrives in such an environment as a hedge. “Wars and inflation fears” have indeed been cited as dual drivers propelling gold to record highs ^[37]. All these factors – war, geopolitical brinkmanship, policy uncertainty, and inflation concerns – have created a climate where safe-haven flows into gold are surging. “There’s a continued flow of safe haven demand amid geopolitical matters that are still kind of wobbly, including the Russia-Ukraine war,” observed Jim Wyckoff, senior analyst at Kitco Metals ^[38]. This appetite for safety is evident not just among institutional investors but even small buyers — for example, U.S. consumers have been snapping up physical gold bars and coins (Costco famously saw its gold bar inventory sell out within hours online in September). It’s a modern-day gold rush underpinned by global anxiety.

Central Banks and Macroeconomic Trends Supporting Gold

The actions of central banks around the world – both in terms of monetary policy and reserve management – have been pivotal to gold’s ascent. On the policy front, as discussed, the U.S. Fed’s pivot to rate cuts has been crucial. The September rate cut was the Fed’s first since late 2024 and came as core inflation showed signs of cooling. Crucially, Powell and other Fed officials have hinted at a “dovish” bias going forward, even as they walk a tightrope on inflation. Investors are now betting that the Fed will deliver two more 0.25% rate cuts by the end of 2025 (one in October and another in December) ^[39]. Market pricing from the CME FedWatch tool shows an over 90% probability of an October cut, and ~80% odds of another in December ^[40]. If these materialize, it would bring the policy rate down significantly from its peak, further lowering bond yields. Gold tends to “perform well in a low-interest-rate environment,” as Reuters notes ^[41], so this outlook has supercharged bullish sentiment.

On the macroeconomic front, a mix of slower growth expectations and potential financial instability is at play. Some economic indicators (like manufacturing data) have softened, and there’s an undercurrent of worry about a late-2025 or 2026 recession, especially if the Fed miscalibrated policy. This has increased hopes that central banks must stay accommodative – again a positive for gold. Additionally, the Fed’s preferred inflation gauge, the Core PCE index, is being closely watched; any sign of cooling inflation further cements the case for rate cuts, whereas any surprise uptick could complicate the picture ^[42]. For now, the bias toward easing is clear, and gold’s surge reflects that.

At the same time, central bank gold buying is a structural trend giving gold a tailwind. In 2022 and 2023, central banks worldwide bought record tonnages of gold, and 2025 continues the trend. By September, central banks’ gold purchases have totaled hundreds of tonnes year-to-date, as many countries seek to diversify away from the U.S. dollar. Societe Generale analysts noted a post-summer rebound in central bank demand, bringing monthly buying back in line with the very high average seen after 2022 ^[43]. Notably, even European central banks (like Poland’s and Hungary’s) have been adding to reserves, not just the usual buyers like China and Russia. This official sector demand provides a steady underpinning to the market – essentially soaking up supply that might otherwise cap price gains. It’s no coincidence that gold’s best year since the 1970s comes amid central banks’ biggest gold binge since that era. As one report quipped, “gold is having its best year since the 1970s” for a reason ^[44] – back then, inflation was rampant and central banks were major buyers too, a parallel to today.

Finally, China’s gold ambitions deserve emphasis. China not only has been buying gold (adding to its official reserves for 10 straight months through 2025 ^[45]), but now is aiming to influence the global gold market structure. By positioning itself as an international gold custodian, China could shake up the traditional dominance of London and New York vaults. This move is seen as China flexing its muscle to increase the yuan’s role and reduce reliance on the West in global finance ^[46]. If more countries opt to hold gold in Shanghai, it could gradually shift the epicenter of bullion trading eastward. For gold prices, China’s plan sends a bullish signal: it implies confidence that gold will retain value long-term, and it may encourage additional buying by nations that see an opportunity to store their gold with a friendly partner (China) rather than in U.S./European vaults. In short, central banks – through both words (rate policy) and deeds (buying bullion) – are tilting the scales in gold’s favor.

Wall Street Analysts: “Room to Run” for the Rally

Despite gold already achieving record highs, many market analysts and financial institutions believe the rally isn’t done yet. In fact, the phrase on Wall Street is that gold still has plenty of “room to run.” Goldman Sachs reaffirmed its bullish outlook, predicting gold will hit $4,000 an ounce by mid-2026 ^[47]. Goldman has pointed to factors like peaking U.S. real yields and robust safe-haven demand to justify this target, which represents further upside from current prices. Similarly, UBS recently raised its forecasts – the Swiss bank now sees gold around $3,900 in the coming months(roughly by early 2026) ^[48]. UBS also noted that holdings in gold exchange-traded funds are climbing again; they project global gold ETF holdings could exceed 3,900 tonnes by the end of 2025, nearing the all-time record set in 2020 ^[49]. Rising ETF inflows reflect renewed investor enthusiasm for gold, bolstering the bullish case.

Analysts emphasize that the macro backdrop supports additional gains. “We expect gold prices to continue rising,”said a report from Goldman, “as U.S. real interest rates should fall further amid additional Fed easing and persistent inflationary pressures” ^[50]. This aligns with the view of many strategists that the Fed will err on the side of growth (cutting rates) even if inflation stays slightly above target – essentially allowing inflation to simmer, which diminishes real yields and lifts gold. The team at ActivTrades also sees a strong floor under prices now. With gold holding above $3,750, they suggest the metal could “consolidate” at these higher levels in the short term, and even eye a new technical resistance around $3,900 as the next milestone ^[51].

Quotes from prominent analysts underscore the optimism. Ole Hansen (Saxo Bank) described a confluence of supportive factors as mentioned earlier, and added that lower yields and risk aversion are feeding into gold’s strength ^[52]. Another voice, Jim Wyckoff of Kitco, noted both the geopolitical and monetary drivers and called the environment “still kind of wobbly” – meaning gold’s safety appeal remains high ^[53]. Perhaps most striking is the view of Christopher Wood, the global head of equity strategy at Jefferies, who is known for his long-term bullish stance on gold. This week, Wood argued that by looking at historical cycles (adjusting for income growth and inflation), gold could plausibly reach as high as $6,600 per ounce in the coming years – a roughly 75% jump from today ^[54]. He sees the current bull market in gold as a “secular” uptrend that is far from over ^[55]. While Wood’s target is an outlier, it grabbed headlines and reflects a growing sentiment that structural forces may propel gold much higher than previous peaks.

Not all experts are wildly bullish – a few urge caution that the market could see bouts of volatility. For instance, some analysts warn that if inflation were to unexpectedly rebound or if the Fed reverses course and turns hawkish, gold could temporarily pull back. “If economic conditions stabilize, or if the Federal Reserve takes a more aggressive stance against inflation, gold prices could face downward pressure,” one analysis noted prudently ^[56]. Additionally, once gold hits psychological round numbers (like $4,000), there could be profit-taking. Volatility tends to increase when any asset reaches new highs, and gold is no exception. That said, the prevailing mood among banks and investment houses is positive. The recent price action – gold making new highs for several consecutive sessions – has been viewed as confirmation that the bull thesis is intact. As Yahoo Finance quipped in one headline, “precious metal has room to run,” and that encapsulates the general outlook. In practical terms, “room to run” means Wall Street expects that on any dips, buyers will step in, and that we could see higher highs in the coming months. The next major target being discussed is the $4,000 level, which would be another historic milestone – and one that seemed fanciful not long ago, but now is arguably within reach ^[57].

Several tangible factors could determine just how far this rally goes. Traders are closely watching U.S. economic data(such as the Core PCE inflation release due at the end of September) and further Fed communications for clues on the pace of rate cuts ^[58]. Any sign that the Fed might slow or pause the cutting cycle could inject caution, whereas confirmation of additional cuts would likely spur more gold buying. Fiscal policy is another wild card – with the U.S. entering an election year in 2026, any large government spending or political turmoil could influence gold. And on the geopolitical front, developments in conflict zones or international relations (e.g. a sudden de-escalation or, conversely, an escalation) can swing safe-haven flows. For now, though, the bias in forecasts is clearly to the upside. As one market expert on X (formerly Twitter) remarked, we may even be on the cusp of a “distinctive parabolic rally” in precious metals if current trends continue ^[59]. That might be hyperbole, but it captures the bullish fervor that has taken hold as gold makes headlines day after day.

Gold vs. Silver and Other Precious Metals

Gold’s shine is spilling over to the broader precious metals complex. Silver, often dubbed the “poor man’s gold,” has been rallying in gold’s slipstream and then some. In late September, silver prices punched up to around $44 per ounce, the highest level since 2011 ^[60]. That represents a massive run for silver, which started the year closer to the mid-$20s. The metal is benefiting from many of the same drivers as gold – safe-haven demand and inflation hedging – but also has a strong industrial component (silver is used in electronics, solar panels, etc.). The surge in silver suggests investors are optimistic about industrial demand or at least using silver as a leveraged bet on the precious metals theme. With silver now at 14-year highs, some analysts see further catch-up potential relative to gold. The gold-to-silver ratio, a measure of how many ounces of silver equal one ounce of gold in price, is still around 85-86, above its historical norms ^[61]. “Silver may yet find fresh upside as investors cast their sights beyond record-high gold prices,” said analyst Han Tan. He noted that with the ratio still above the recent average (~82), “silver may yet have more room to catch up to its more illustrious precious metal cousin.” ^[62] In plain terms, if gold’s rally pauses, silver might continue to climb, narrowing that ratio gap – a scenario often seen in late stages of precious metal bull runs, where silver can outperform for a spell.

Platinum and palladium, which have more purely industrial profiles (especially palladium), have also seen price gains, albeit for somewhat different reasons. Platinum has risen to about $1,480/oz ^[63], its highest in several years. Part of platinum’s strength comes from a tight supply outlook and hopes for increased automotive demand (platinum is used in catalytic converters, and there’s been talk of substituting some palladium with platinum in autocatalysts due to palladium’s prior high costs). The broader investor interest in hard assets and commodities is also lifting platinum’s boat. Palladium, which had been in a bear market since 2021, saw a bounce to around $1,225/oz ^[64]. That’s well off its $2,800+ peak from a few years ago, but the recent uptick suggests the worst may be over for palladium, especially if Chinese and global car sales improve (palladium is chiefly used in gasoline vehicle catalytic converters).

It’s worth noting that investment demand tends to focus on gold and silver, as those are seen as monetary metals. Platinum and palladium are more driven by industrial fundamentals. Still, during periods of strong gold bullishness, investors sometimes broaden their exposure to the entire precious metals space, which can create sympathetic rallies. This appears to be happening now: the fact that all four major precious metals (gold, silver, platinum, palladium) were up in late September indicates a broad-based move into hard assets. The backdrop of a potentially weaker dollar, lower interest rates, and global jitters is a tide lifting all boats in this sector.

Comparatively, silver’s performance in 2025, while impressive, lagged gold until recent weeks. Gold’s ~40% YTD jump outpaced silver’s gains for much of the year, which is why the gold-silver ratio climbed. But silver’s late surge to multi-year highs has started to close that gap. Many traders believe silver could outperform if the cycle continues, given it’s still below its record high (~$50 in 2011) and might play “catch up” to gold’s record. The renewed interest is visible in ETF flows too – iShares Silver Trust (SLV), a large silver ETF, saw significant inflows in September alongside the gold ETFs.

In summary, while gold rightly dominates the headlines with its record-breaking run, other precious metals are also thriving in this environment. For investors, gold remains the bellwether and is often bought first. But the spillover into silver and platinum suggests confidence that the factors supporting gold are not isolated – they reflect a larger narrative of inflation concerns, demand for tangible assets, and perhaps skepticism about the equity and bond markets. If gold continues to rise, silver could ride shotgun and possibly even outperform in percentage terms. And even if gold were to consolidate or pull back, silver’s dual role as an industrial metal might give it a different kind of support. For those watching the space, the key ratio and relative moves will be an important signal: a declining gold/silver ratio often accompanies the late stages of a precious metals bull run, whereas a rising ratio can signal caution. As of now, that ratio is starting to decline from extreme highs, hinting that silver’s time to shine may be arriving alongside gold’s glitter ^[65].

Outlook: Is the “New Gold Rush” Here to Stay?

With gold at all-time highs, many are asking whether this is a peak or just a stepping stone to higher levels. The consensus among Wall Street strategists and commodity experts is that the fundamentals driving gold’s surge remain firmly in place. Monetary policy is turning more gold-friendly by the day – if the Fed delivers additional rate cuts as expected, real yields will likely fall further into negative territory, a scenario in which gold historically flourishes ^[66]. Global central banks show no sign of stopping their gold purchases; if anything, geopolitical tensions (e.g., sanctions risks or currency conflicts) might spur even more official buying as a form of financial security. The novel support from China’s initiative could also add a new layer of demand over time ^[67].

Geopolitically, unfortunately, the world is not significantly calmer than a year ago. The war in Eastern Europe grinds on, great power competition (U.S./China) is simmering in the background, and numerous regional risks persist. As long as such tensions exist, gold will retain its allure as a hedge against “tail risks”. Additionally, with a U.S. election year on the horizon (2026), political uncertainty domestically could fuel bouts of market volatility – another argument for holding gold. President Trump’s inclination toward easy money and occasional unconventional remarks on economic matters introduce an extra layer of unpredictability that markets must price in ^[68]. In short, the safe-haven narrative for gold is alive and well.

That said, investors will be monitoring several signposts that could alter gold’s trajectory. One is the trajectory of inflation: if inflation were to spike again meaningfully (due to oil prices or other shocks), central banks might be forced to halt rate cuts or even hike again, which could cool off gold’s rally. Conversely, an orderly decline in inflation coupled with gentle rate cuts is almost an ideal scenario for gold – it implies low real rates and no aggressive Fed to spoil the party. Economic growth data is another factor: a severe recession could paradoxically benefit gold (via safe-haven flows and deeper rate cuts), but a soft landing or re-acceleration might lead investors to rotate back into riskier assets at gold’s expense.

For now, market sentiment remains strongly in gold’s favor. Each pullback in price has been shallow and met with new buying interest. As noted, gold has been setting fresh highs almost daily ^[69], indicating strong momentum. “Gold’s record-setting rally… has yet to reach its conclusion,” as one mining industry news outlet summarized the prevalent analyst view ^[70]. Many institutional investors who were underweight gold are now rushing to increase their allocation, whether through futures, ETFs, or physical bullion, to catch up with the trend. Even retail investors are joining in – demand for gold coins and bars is reportedly high globally, from North America to Asia. This broad participation gives the rally a sturdy foundation.

In what some are dubbing a “new gold rush”, the precious metal has reasserted itself as a cornerstone of portfolios in 2025. The coming months will reveal just how far this rally can go. Will gold hit $4,000 – and if so, how quickly? Can it maintain these lofty levels, or will profit-taking set in? Much will hinge on the interplay of the factors discussed: central bank easing, inflation trajectory, geopolitical developments, and investor risk appetite. For now, the scales are tipped in favor of the bulls. As long as Wall Street sees gold as an effective diversifier and hedge in a world of low yields and high uncertainty, the precious metal’s glittering run may well continue. The fact that phrases like “parabolic rally” and comparisons to the 1970s are entering the conversation ^[71] ^[72] shows just how dramatic and unexpected this surge has been. Gold has not only broken records – it has broken into the mainstream narrative in a way not seen in years.

Bottom line: Gold’s surge to record highs in September 2025 is the result of powerful converging forces – easier monetary policy, geopolitical upheaval, robust investor demand, and structural shifts in how nations view gold. Those forces are still unfolding. While short-term corrections are always possible, the overarching conditions suggest that gold’s rally likely has further to run, vindicating those on Wall Street who predicted that the precious metal’s best days were not behind it, but still ahead. Investors and analysts around the world will be watching closely to see if this truly becomes the “golden” decade many are now anticipating – one where gold solidifies its status as both a refuge and a smart investment in uncertain times.

Sources: Gold price and analyst commentary from Yahoo Finance ^[73] ^[74], Reuters ^[75] ^[76], Bloomberg ^[77], Business Insider ^[78], Mining.com ^[79] ^[80], and other financial news outlets up to September 24, 2025.