Gold fever: Why is gold having its biggest year since 1979? Yellow metal soars over 50% in 2025

The pace at which gold is rising this year, it might just be the golden year.The yellow metal is shining brighter than ever in 2025, hitting a stunning $4,000 an ounce this week, as investors rush to shield their wealth from global uncertainty. However, unlike typical market rallies, this surge signals worry rather than confidence, with Wall Street betting the climb is far from over. All that glitters….is not gold?Historically, gold shines when times are tough. This is because gold provides a safety net for investors when the economy is under stress and inflation concerns rise.This year, it is rising faster than even 1979, a time when the US was struggling with a massive energy crisis and a whopping double digit inflation.This year, gold has jumped 54%, on course for its best performance. Its gains have outpaced past shocks, from the September 11 attacks to the 2008 financial meltdown and the pandemic.However, what makes this rally unusual is that it is happening alongside a booming stock market. Big Tech companies, powered by excitement around artificial intelligence, have lifted equities even as gold climbs.“The stock market and gold are marching to the beat of two very different drummers,” said David Kotok, co-founder of investment firm Cumberland Advisors, was quoted as saying by CNN.

Gold’s rally reflects lingering worries about inflation, which has stayed above the Federal Reserve’s 2% target for over four years, and broader economic uncertainty. Furthermore, the US has raised tariffs to levels unseen since the Great Depression.This month, gold has already gained 5% as the US government shutdown disrupts key economic data, leaving investors in the dark. At a time like this, investors are taking bets on an asset not linked to a single government – gold.“Global resilience has not yet been fully tested,” said IMF managing director Kristalina Georgieva. “There are worrying signs the test may come. Just look at the surging global demand for gold.”One of the key drivers of the golden rally is the US Dollar, which is facing one of its worst years in decades.This has further pushed investors toward gold, raising doubts about the greenback’s global safe-haven status. Central banks are buying heavily, a trend accelerated after sanctions froze Russian assets in the US, which prompted foreign officials to question where to hold their money.Goldman Sachs predicts prices could hit $4,900 by the end of next year, CNN reported. Hedge fund billionaire Ken Griffin warned, “We’re seeing substantial asset inflation away from the dollar as people are looking for ways to effectively de-dollarize.” Ken told Bloomberg, that it’s really concerning that investors are starting to see gold as a safer bet than the US dollar.