Weekly Buzz: Gold prices have surged 25% – so what’s next? ✨

Gold is up 25% since December last year, now hovering around US$3,350 per ounce. If you’ve been following headlines, this shouldn’t come as a surprise – when uncertainty climbs, gold tends to shine. So what does history say about what’s next?

What’s driving gold now?

For one, the US Federal Reserve has paused rate cuts since December. Historically, these pauses have coincided with strong gold performance. We saw this back in 2002, again during the Global Financial Crisis, and once more in early 2020 before the pandemic – all periods marked by heightened uncertainty.

A Fed pause is often a signal that policymakers are unsure of the path ahead. Combine that with today’s macro risks – tariff tensions, persistent inflation, and concerns over the US dollar – and you get a recipe for sustained demand for the precious metal.

Several forces could keep the momentum going. Central banks are still buying at record levels, providing a steady demand floor. Meanwhile, gold ETF inflows are rebounding after years of outflows, tightening available supply. With news headlines keeping investors on edge, the appetite for safe-haven assets isn't fading anytime soon.

What does this mean for you?

Gold's performance this year shows why diversification isn't just academic theory. It's not about going all-in on any one asset, but about having a strategic allocation strategy so that when one part of your portfolio stumbles, another can pick up the slack.

Safe-haven assets serve as a hedge against a variety of risks, essentially preparing your portfolio for a wider range of outcomes. Periods of market uncertainty – whether from trade tensions, interest rates, or currency volatility – are simply part of long-term investing. A well-diversified portfolio is built to handle them without the need to constantly react to headlines.

(For more on gold’s role as both a portfolio diversifier and a source of returns, read our H1 2025 Returns.)

💡 Investors’ Corner: When Main Street beats Wall Street

Retail investors are often portrayed as the latecomers to market rallies – showing up just as the “smart money” heads for the exits. 2025 is proving that narrative wrong.

Everyday investors are now adding US$1.3 billion to markets daily – a 32% jump from last year's pace. When institutions fled during April's turbulence, everyday investors "bought the dip", pouring US$8.8 billion into stocks over five trading days. Morgan Stanley's survey now shows 62% of retail investors are bullish on US equities – the highest level since they started tracking this data.

With easier access to investing platforms and real-time information, everyday investors have evolved from market followers to market drivers. This shift hasn't gone unnoticed by governments either. The proposed Invest America Act would give every American child a US$1,000 investment account at birth, one example of how policymakers now view retail participation as an economic force.

Successful investing isn't about having insider knowledge or perfect timing, it's about staying invested in diversified markets over time. When millions of individual investors participate consistently, it creates a broader base of market support, benefiting investors both individually and as a collective.

These articles were written in collaboration with Finimize.

🎓 Simply Finance: Safe-haven assets

When markets get rocky, investors often turn to safe-haven assets – investments that tend to hold their value or even gain during market uncertainty. The classic safe havens include government bonds like US Treasuries, gold, and certain currencies like the US dollar or the Japanese yen.