Gold Rally Extends as Global Uncertainty Fuels Record Highs
Gold has surged to nearly 50 all-time highs in 2025, cementing its status as one of the strongest-performing assets in global markets.
According to strategists at RBC Capital Markets, the rally is not only supported by favorable macroeconomic conditions, but is being powered by what they call “compounding uncertainty” — a growing mix of political, fiscal, and monetary instability that continues to strengthen gold’s role as a hedge, safe haven, and portfolio diversifier.
RBC analysts led by Christopher Louney noted that a combination of political tensions, including the potential U.S. government shutdown, renewed U.S.–China trade frictions, concerns over Federal Reserve independence, and ongoing fiscal and inflationary pressures, have all contributed to this environment of unease. Investors are responding by increasing their gold allocations to counter risk and protect purchasing power.
Rotation From Stocks and Bonds Adds Momentum
Even modest portfolio shifts from equities and bonds can have a significant impact on gold prices, RBC said, given the relatively small size of the global gold market compared to other asset classes.
Strategists also highlighted that this rally — roughly 700 days in duration — remains shorter than previous gold bull cycles, some of which lasted over 1,000 days, implying that further upside remains possible.
RBC has raised its price forecasts, now expecting a base case of $4,227 per ounce in Q4, climbing to $4,427 in 2026. Its high scenario ranges from $4,963 in Q4 to $5,108 next year, signaling that a move beyond $5,000 is no longer viewed as improbable.
Institutional and Central Bank Support Strengthens the Rally
Despite the strong performance, investor positioning remains far from extreme. Gold-backed exchange-traded products (ETPs) have yet to reach record holdings, and managed money exposure still has room to expand. Interest in upside options also remains high, suggesting continued appetite for exposure to further gains.
RBC’s discussions with institutional investors suggest gold’s portfolio share — traditionally capped near 5% — is now being reconsidered in the 5–10% range, with limited signs of profit-taking so far.
At the sovereign level, central banks continue to act as a major source of demand, with official purchases expected to exceed 850 tons this year. RBC emphasized that these purchases are strategic and structural, positioning gold as a core reserve asset, in some cases ranking above euros or U.S. Treasuries on central bank balance sheets.
Consumer Demand Stable Despite High Prices
While elevated prices may dampen physical demand in India and China, RBC expects cultural affinity and expectations of further price appreciation to keep buyers active. At the same time, scrap supply is projected to remain below expectations, as holders delay selling in hopes of higher future prices.
RBC does not rule out a temporary consolidation phase similar to the one seen between April and August, but says a deeper correction would likely require a sharp improvement in macro conditions and a collapse in uncertainty — outcomes the firm sees as unlikely in the near term.
As the analysts put it, “bubbles do tend to pop, but they also manage to float” — and for now, gold’s bull run still appears afloat.
