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Gold Heads for Best Year Since 1979 as Crises and Central Bank Buying Fuel Rally

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Gold is on track for its strongest annual performance since 1979, with futures in New York surging nearly 71% in 2025. Prices have climbed from around $2,640 an ounce at the start of the year to above $4,500, driven by global uncertainty ranging from trade distortions and geopolitical conflicts to inflation risks and currency volatility. Analysts say investors are flocking to gold as a safe haven, echoing conditions last seen during the late-1970s energy crisis under former US president Jimmy Carter.

Expectations of US Federal Reserve rate cuts and a weaker dollar have further boosted gold’s appeal, as lower bond yields make non-yielding assets more attractive. Gold’s gains have far outpaced equities, with the S&P 500 up about 18% this year. Major banks such as JPMorgan Chase expect prices to continue rising, forecasting gold could cross $5,000 an ounce in 2026 if current trends persist.

A key driver behind gold’s rally has been aggressive buying by central banks, led by China, as countries seek to reduce dependence on the US dollar and Treasury assets. Central banks have added more than 1,000 tonnes of gold annually over the past three years, well above historical averages. The surge has also lifted other precious metals, with silver, platinum and palladium posting sharp gains, reinforcing gold’s role as a hedge in an increasingly uncertain global financial landscape.

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News Trending War

Threat to Ships in Ukraine Conflict Causes Soaring Wheat Prices

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Wheat prices on the global markets have experienced a sharp rise following Russia’s declaration that it would consider ships heading to Ukrainian ports as potential military targets. This decision came after Moscow withdrew from a UN agreement that guaranteed safe passage for grain shipments through the Black Sea. In recent nights, Russia has launched attacks on Ukraine’s grain facilities in cities like Odesa. The White House has accused Russia of planning to attack civilian ships and then falsely blaming Ukraine for it. As a result of these developments, European stock exchange wheat prices surged by 8.2% to €253.75 per tonne, with corn prices also rising by 5.4%. US wheat futures recorded their highest daily increase since Russia’s invasion of Ukraine in February 2022, jumping 8.5%. President Vladimir Putin has expressed willingness to return to the international grain agreement if certain demands, including the lifting of sanctions on Russian grain and fertiliser sales, are met.

Amid these escalating tensions, Russian air strikes continued in Black Sea coastal cities for three consecutive nights, leading to civilian casualties. The attacks have targeted grain export infrastructure and raised concerns about the safety of shipping routes for essential food supplies. Ukraine’s options for exporting grain by rail are limited, with rail capacity smaller than shipping volumes, and some EU countries in Eastern Europe blocking Ukrainian grain to protect their own farmers.

Analysts have warned that Russia’s threatened escalation could disrupt waterborne grain shipments from the Black Sea, impacting both Russian and Ukrainian exports. Some Ukrainian officials have called on the UK, US, France, and Turkey to provide military convoys and air defenses to protect grain ships heading to Odesa.

The situation has raised concerns about potential impacts on global food security and inflation, particularly in developing countries, leading to social instability, food shortages, and increased migration. Critics accuse Russia of using food supplies as a political tool in its conflict with Ukraine.

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