Why is the Price of Gold rising rapidly? ILI expert commentary

Central banks have accumulated the maximum amount of physical gold in their reserves. According to gold dealers, its price at the end of 2025 could reach $3500 per ounce, although on April 22, the price approached this psychological mark closely already. In light of D. Trump's policy towards the US Central Bank (Fed) and its Chairman J. Powell, many countries and serious financial organizations have begun to look more closely at alternatives to the dollar. It seems that the Trump government does not like the dollar's function as the world's reserve currency.

The US dollar is the leading currency among all currencies in the world by a huge margin. Even the euro lags behind the dollar by 3 to 5 times in all major indicators (use in international settlements, central bank reserves, and debt issuance). But the EU, China, and Wall Street cannot help but be concerned about the current poorly predictable monetary, trade, and debt policies of the United States. Amid global turbulence, the zeroing out of international trade rules, and the most acute crisis in the system of international law and security, everyone is returning to the eternal institution, commodity, and standard. This is GOLD.

The government, the central bank, and large financial organizations are the first recipients of new, freshly printed money. And gold has been and remains a safe haven, that retains its purchasing power in times of crises and economic turbulence. In 2005, a gold ounce cost $500. At the end of April 2025, it will cost ~$3,100-3,300. Can you imagine a 6.5-fold increase? The average annual return on gold in dollars is ~9%. Here is an investment tool for you. Yes, these are not "hot" stocks where you can earn tens of percent a year and then lose it in the same way.

Gold has been and remains a reliable anchor. Gold was the foundation of the global financial system before the nationalization of financial institutions. It was on the gold standard that countries historically had the lowest inflation, i.e., stable prices and purchasing power of money. It was the gold standard that guaranteed the political neutrality of international trade.

Then the dollar began to fulfill this function. It performed worse than the gold standard, and then, in the late 1960s, the US government completely untied it from gold, forcing everyone to trust money wrappers. 55 years have passed, and now we are facing another challenge on a truly global scale. Once upon a time, people in the post-Soviet space used to say, "A dollar is a dollar even in Africa. But the phrase "gold is gold even in Africa" is becoming, perhaps, the only universal anchor for building trust in the future monetary architecture of the world.

No one knows what the transformation of the old financial system will look like. There is no doubt about one thing: it has already begun, but the direction, intensity, and speed are unknown. Like an unknown is the answer to the question of the endpoint of a movement. The future is wide open to variations, but history shows that the future will be prosperous, free, and peaceful if gold returns to the status it had in early 20th-century monetary policy.

We are preparing a large, detailed material on this topic, so subscribe to the Institute's page to keep up with our experts’ latest and most relevant materials!