Gold is on a tear. In 2025, it's broken all-time records, trading above US$4,200 an ounce. That’s around a 60% jump just since January; a stunning performance for an asset often thought of as stable. And gold isn’t alone. Silver, platinum and palladium have all surged too, with silver up nearly 70% this year. So, what’s driving this boom? And what does it mean for Australian investors?
Two decades ago, gold was trading for less than US$400 an ounce. Since then, it has steadily climbed through economic booms, financial crises, and global uncertainty, multiplying its value more than tenfold. The early 2000s saw steady gains as global markets expanded and inflation fears stirred. In 2011, gold hit a major peak around US$1,900 amid the Eurozone debt crisis, before pulling back and settling into a long period of sideways movement.
Source: ABC Bullion, 1 January 2003 to 15 October 2025Momentum picked up again in 2020, when the COVID-19 pandemic drove investors toward safe assets. Gold briefly passed the US$2,000 mark, and after some ups and downs, it took off again in late 2022. From US$1,600 in October 2022 to over US$4,000 by October 2025, this latest leg of the journey has been steep and swift. For Australian investors, the ride has been even more rewarding thanks to a weaker local dollar boosting the price in Aussie terms.
Source: ABC Bullion, 1 January 2020There’s no single reason gold is soaring, it’s more likely a mix of global worries, shifting expectations, and big money moves all hitting at once. Inflation fears, fuelled by years of stimulus and money printing, have left many investors wondering how much their dollars are really worth. At the same time, global tensions, conflicts, trade disputes, and economic uncertainty, have nudged investors towards safety.
As central banks began hinting they might pause or even reverse their interest rate hikes, gold got another boost. Lower interest rates tend to make gold more attractive, since it doesn’t pay interest or dividends. Add in concerns about the strength of the US dollar and the fact that some of the world’s largest central banks have been buying up gold in record volumes, and the picture starts to become clear.
Then there’s the human side of markets. As gold broke through one record after another, more investors jumped on the bandwagon. That fear of missing out (FOMO) fed the fire. Higher prices attracted more attention, which brought in more buyers, and the cycle continued.
Gold may be leading the charge, but it hasn’t gone alone. Silver has climbed even faster in percentage terms, surging to around US$50 an ounce and revisiting levels not seen since 2011. Often called gold’s little brother, silver tends to follow in gold’s footsteps, offering investors a cheaper way to tap into the same themes. But silver also benefits from strong industrial demand, particularly from the solar and tech industries, which has kept supply tight and prices firm.
Platinum has outshone both gold and silver this year, rising more than 80 percent since January. Palladium, another metal used heavily in industry (especially in car manufacturing) has also rallied. While these metals each have their own supply and demand stories, they’ve all been swept up in the same market mood. When gold shines, it tends to cast a glow over the entire precious metals space.
Australia is one of the world’s biggest gold producers, so rising prices are good news for the economy. In 2024, gold was the nation’s fourth-largest goods export, generating over A$32 billion. That’s not just good for government coffers and the mining sector; it’s also been a positive for investors.
Locally listed gold ETFs have seen strong inflows, as more Australians look to get exposure to the metal. Physical bullion demand has surged too, with long queues forming again at some bullion dealers. And with the Australian dollar falling against the US dollar, the local price of gold has been even more impressive. For those holding gold in Australian dollars, the returns have been amplified.
Lines stretch up Martin Place in Sydney at the ABC Bullion stores as Australians look to buy gold.The currency effect is worth watching. If the Aussie dollar stays weak, gold prices in local terms may remain high even if the global price cools off. On the flip side, if the dollar strengthens, it could take some of the shine off for local investors.
After such a strong rally, many are wondering if gold and its companions can keep going. Some of the forces behind the rise, like inflation concerns, geopolitical tensions, and central bank buying, are still very much in play. If economic uncertainty persists or interest rates fall further, gold could continue to climb.
But markets don’t move in straight lines forever. Sharp gains often lead to pauses or pullbacks. As gold gets more expensive, it becomes more tempting for miners to ramp up production, which could eventually add to supply and cap prices. And if inflation eases or the global economy stabilises, some of the urgency to hold gold might fade.
Investor sentiment can shift quickly. The same excitement that helped push prices up can just as easily reverse if conditions change. That’s why it’s important to think beyond today’s headlines.
If you’ve benefited from gold’s rise, it might be a good time to check your portfolio and make sure it’s still balanced. For those considering buying it now, keep in mind that jumping into any asset after a big run carries risks. It’s always better to invest with a plan, rather than chasing past performance.
Precious metals like gold can play a valuable role in a diversified portfolio, especially as a hedge against uncertainty. But they’re not a one-size-fits-all solution. Speak to your adviser about what makes sense for your situation, and how much exposure to commodities fits with your goals.
The Investment & Research team at PSK are always monitoring market conditions and data points to ensure portfolios align with our overall long-term objectives. If you’d like to discuss any of the points raised, please contact your Adviser or call us on (02) 8365 8300.
General Advice Warning - Any advice included in this article has been prepared without taking into account your objectives, financial situation or needs. Before acting on the advice, you should consider whether it's appropriate to you, in light of your objectives, financial situation or needs.
