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Gold has hit multiple records in 2025, but analysts believe the rally is far from over, with some forecasting the yellow metal could climb to US$5,000 per ounce amid geopolitical tensions and a buying spree by central banks.

Spot gold broke through the US$4,500-per-ounce mark for the first time, reaching a record US$4,510 on Christmas Eve on Wednesday, which was 72 per cent higher than the end of last year, when it stood at US$2,624.

This was the biggest annual jump for the precious metal, exceeding the 70 per cent rise in 1979, according to Brian Fung, CEO of the Hong Kong Gold Exchange. The increase followed a 26 per cent surge in 2024.

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Local prices rose in tandem, with gold in Hong Kong hitting a record HK$41,855 (US$5,382) per tael (37.51 grams) on Monday, according to the exchange.

Fung expected the rally to continue in 2026, with prices potentially hitting US$5,000 per ounce.

“The gold rally in 2025 was driven by expectations of interest-rate cuts, geopolitical tensions, and tariffs introduced by US President Donald Trump,” Fung told the Post. “Individual investors and central banks wanted to diversify away from US dollar assets, and gold became a safe-haven alternative.”

The Hong Kong government is rolling out big plans in 2026 to position the city as a global commodities trading hub. Photo: Shutterstock alt=The Hong Kong government is rolling out big plans in 2026 to position the city as a global commodities trading hub. Photo: Shutterstock>

He said all the factors supporting gold showed “no sign of disappearing any time soon, which is why prices are set to go up further in 2026”.

Goldman Sachs lifted its gold price forecast for December 2026 to US$4,900 per ounce, with analyst Lina Thomas citing strong structural demand from central banks and easing by the US Federal Reserve.

Morgan Stanley predicted US$4,500 per ounce by mid-2026, while Bank of America and JPMorgan both expected prices to surpass US$5,000 per ounce by the end of 2026.

Fung said central bank buying remained a major driver of the rally. “Central banks traditionally invest in US Treasuries and other US dollar assets,” Fung said. “But amid rate cuts and geopolitical tensions, they want to decrease their holdings in US dollar and gold has become a natural choice.”

In October, China reduced its US Treasury holding to its lowest level in 17 years, falling to US$688.7 billion from US$700.5 billion in September, according to US Treasury Department data.

At the same time, Beijing ­extended its gold-buying streak for a 13th straight month in November, adding 30,000 ounces to its reserves. That brought its total stock to 74.12 million ounces, worth US$310.6 billion, official data showed.

Amid the rally, the Hong Kong government is rolling out big plans in 2026 to position the city as a global commodities trading hub.

All the factors supporting gold – including tariffs and geopolitical tensions – show no sign of disappearing any time soon, according to some traders. Photo: EPA alt=All the factors supporting gold – including tariffs and geopolitical tensions – show no sign of disappearing any time soon, according to some traders. Photo: EPA>

This included plans to establish a gold central clearing system and a gold industry association, and to deepen cooperation with the Shanghai Gold Exchange to expand its influence in international gold pricing, Secretary for Financial Services and the Treasury Christopher Hui Ching-yu said on Monday.

The government’s newly formed Commodity Strategy Committee held its first meeting on Monday under Financial Secretary Paul Chan Mo-po, as Hong Kong looked to build a commodities ecosystem that would generate new growth beyond traditional finance.

“For investors, the question is not whether gold is ‘too high’, but what role it plays,” said Stephen Innes, a managing partner at SPI Asset Management.

“If gold is being treated as a short-term trade, then timing matters and patience is required,” he said. “But if gold is held as insurance against policy error, currency debasement, or systemic shocks, then price becomes secondary to purpose.”

Innes added: “You don’t buy insurance because it’s cheap; you buy it because the cost of not having it rises quietly until it’s too late. And this is the central bank footprint where buyers have become price-agnostic.”

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2025. South China Morning Post Publishers Ltd. All rights reserved.

• The EBRD is providing an equity investment of up to €25 million in Voli Trade to build a modern logistics and distribution centre in Podgorica, Montenegro
• The project will boost Voli’s operational efficiency, drive digital transformation and deliver top-tier energy efficiency
• Dedicated support for digitalisation and cybersecurity, and a targeted internship programme, will promote competitiveness and equal opportunities in the sector

The European Bank for Reconstruction and Development (EBRD) is investing up to €25 million in Voli Trade, Montenegro’s largest food retailer, to finance the construction of a state-of-the-art logistics and distribution centre in Podgorica. This strategic investment will strengthen Voli’s operational efficiency, support its digital transformation and reinforce the firm’s commitment to sustainability and inclusion.

The new logistics and distribution facility will span 25,600 m2, featuring advanced energy-efficiency measures to achieve an energy rating significantly above national requirements.

The EBRD’s investment includes dedicated technical assistance for digitalisation and cybersecurity, supporting Voli in adopting modern systems of warehouse and vendor management and in piloting platforms to improve cyber resilience. The investment will enable a targeted internship programme focused on women, to address underrepresentation and promote equal opportunities in the sector.

Tamara Tosic, EBRD Regional Head of Food and Agribusiness, South-Eastern Europe, said: “Our investment supports Voli as it scales up its operations and strengthens its platform for long-term growth. Enhancing distribution infrastructure and data-driven capabilities is central to building resilient and competitive food retail businesses across the region.”

Remon Zakaria, EBRD Head of Montenegro, commented: “This investment marks a new chapter in our partnership with Voli. By supporting the construction of a modern logistics centre and advancing digital and green standards, we are helping Voli strengthen its competitiveness, drive sustainable growth and set new benchmarks for the retail sector in Montenegro.”

Dragan Bokan, Chairman of Voli Trade, added: “The contract we signed today is a strong incentive not only for Voli, but also for the overall development of a modern, competitive retail sector in Montenegro. I would like to emphasize in particular, how much cooperation with such a respectable European institution as the EBRD means to us. A partnership with a financial institution of such credibility is not just financial support – it is confirmation that Voli meets the highest European standards and is a reliable long-term partner. At the same time, it is a strong message that Montenegrin companies, when they operate in a disciplined, strategic and responsible manner, can be part of European trends and be recognized as valuable investment opportunities. I would like to take this opportunity to thank the EBRD for the trust it has shown us for almost two decades. This partnership has grown based on mutual respect, professionalism and the belief that development must be accompanied by responsibility, sustainability and a clear vision.”

Voli Trade is the leading food retailer in Montenegro, with 80 multi-format stores across the country.

The EBRD is a leading institutional investor in Montenegro, having invested more than €1 billion through 105 projects to date.