Gold extended its meteoric rise on October 6, 2025, hitting an all-time high above US$3,900 per ounce, capping a remarkable 50% gain so far this year.
The metal’s rally has been fueled by expectations of further U.S. Federal Reserve rate cuts, a weakening dollar, and deepening political uncertainty in Washington.
After surging 11.9% in September, gold now trades just shy of the US$4,000 mark, as the U.S. dollar struggles to rebound from a marginal 0.02% decline over the same period.
Analysts say the Fed’s recent 0.25% rate cut, which lowered the federal funds rate to 4.00%–4.25%, has boosted borrowing but made U.S. assets less appealing to yield-seeking investors, pushing them toward safe havens like gold.
As investors move out of dollar-denominated assets, the greenback continues to slide, amplifying gold’s appeal as a store of value and inflation hedge.
The U.S. Dollar Index, a key measure of the currency’s strength, has fallen over 9% year-to-date, allowing emerging market currencies like the naira and cedi to post gains.
UBS analysts note that gold’s negative correlation with the dollar remains strong, underscoring its role as a hedge against currency weakness.
Adding to the rally, the U.S. government shutdown that began in early October has intensified concerns among investors.
Congress’s failure to pass a spending bill for the 2026 fiscal year, amid partisan clashes over federal spending, foreign aid, and healthcare subsidies, has rattled markets and reinforced demand for gold as a safe-haven asset.
UBS forecasts as much as 150% upside in gold-related valuations, projecting prices to hit US$4,500 per ounce by 2026. “Gold mining stocks still look cheap,” UBS analysts said in their report titled In Gold We Trust, adding that EV/EBITDA multiples could expand by 20–40%.
The bank’s December projection of US$3,900, realized this month, is now seen as a steppingstone to even higher territory.
UBS expects U.S. inflation to remain sticky, while internal divisions within the Federal Reserve and ongoing geopolitical tensions continue to weigh on the dollar.
These conditions, analysts argue, will sustain the shift toward precious metals like gold and silver, which have both demonstrated strong inverse relationships with the greenback.
Gold began 2025 at US$2,625 per ounce, rising every month except July, when a 0.40% dip coincided with a 3.40% dollar rebound. September remains its strongest month yet, but with bullish momentum holding, October could surpass that record.
The metal’s current trajectory evokes comparisons with 1979’s historic 133% annual gain, marking 2025 as one of gold’s most powerful rallies in modern history.
