A mixed bag of geo-political and economic factors helped drive the price of gold to an all-time high of $3,350 per ounce yesterday, reflecting a remarkable 25% increase since the start of the year.
Heightened geopolitical instability, particularly ongoing tensions between the US and China, has rattled investors. With growing restrictions on trade — such as US bans on exporting AI technologies to China and that country's retaliatory tariffs — markets have responded by moving capital into safer assets. Gold, long considered a hedge against uncertainty, has benefited directly.
To grasp the magnitude of what's happening in the gold market, it’s helpful to look back.
Just five years ago, in April 2020, gold traded at roughly $1,700 per ounce. A decade ago, in April 2015, it was hovering near $1,200. And 20 years ago, in 2005, gold was a modest $430 per ounce.
Over two decades, the price has skyrocketed by more than 675%, and it has nearly doubled just in the past five years. This historic climb is far from accidental — it is the result of converging global pressures that have reshaped the market's demand for stability.
Also factoring into gold ascent is the weakening of the US dollar, which has fallen to its lowest level since April 2022, making gold more affordable for international investors. This depreciation enhances gold's appeal as an alternative store of value.
In addition, central banks, notably China's, have been increasing their gold reserves. China has added to its reserves for five consecutive months, reflecting a strategic move to diversify away from dollar assets amid geopolitical tensions.
Gold exchange-traded funds (ETFs) have seen significant inflows in the first quarter of 2025. This marks the strongest demand since early 2022, indicating robust investor interest in gold as a hedge against inflation and economic uncertainty.
Gold production, meanwhile, continues to be concentrated in a few powerhouse nations.
China remains the largest gold producer globally, with 403 metric tons mined in 2022—a consistent lead it has held since 2007. Australia follows closely, contributing roughly 310 metric tons last year.
Russia, despite sanctions and geopolitical isolation, still managed to produce approximately 310 metric tons in 2024, thanks to its vast underground reserves. Canada and the United States rounded out the top five, with estimated productions of 200 and 170 metric tons, respectively, in that same year.
On the other side of the equation, gold reserves held by central banks illustrate another layer of the global picture. The United States leads with 8,133 tons — approximately the combined reserves of Germany, Italy and France. Germany holds 3,351 tons, while Italy and France each maintain over 2,400 tons. Russia ranks fifth with an accumulation of 2,336 tons.
For the jewelry industry, the implications are complex. Higher raw material costs for gold will undoubtedly push retail prices upward, however, the intrinsic value of precious metal jewelry as both an adornment and investment is more pronounced than ever. Consumers may increasingly view high-karat pieces not just as luxury items, but as long-term financial assets.
With gold at $3,350 and climbing, its luster — both economic and aesthetic — has never been more on point.
Credit: Image by The authors are unknown, but the pictures belong to the Alliance for Responsible Mining., CC BY-SA 4.0, via Wikimedia Commons.
