What factors have driven the sharp rise in gold prices?

The main drivers were strong options market activity, rising geopolitical tensions, and currency weakness, while profit-taking slightly tempered gains.

What role did gold-backed ETFs play in the price surge?

Record monthly inflows into gold ETFs — 146 tonnes worth $17.3 billion — were the key catalyst, led by demand from Asia, Europe, and North America.

How does WGC view gold’s investment value going forward?

WGC sees gold as a short-term hedge and long-term diversifier, expecting continued strength unless a major liquidity crisis causes both gold and equities to fall.

Gold will Continue to be a Good Hedge In Spite of Recent Rally, Says WGC

Gold | 2025-10-08 22:55:37

The stellar run in gold prices was mainly driven by record monthly inflows into gold-backed exchange-traded funds (ETFs).

By Paul Ploumis

Gold will Continue to be a Good Hedge In Spite of Recent Rally, Says WGC

Summary

Gold prices surged 47% in 2025, hitting new record highs 39 times, marking the best annual return since 1979.
Massive ETF inflows of 146 tonnes ($17.3 billion), led by Asia, Europe, and North America, fueled the rally.
WGC sees gold as a short-term hedge and long-term diversifier, expecting strength to continue unless a major liquidity crisis occurs.

SEATTLE (Scrap Monster): The World Gold Council (WGC) announced publication of its latest gold market commentary.

This year, gold has already reached new highs 39 times. Gold prices have increased 47% so far this year. Since 1979, the commodity produced the highest return in a calendar year. Strong options market activity, growing political tension, and currency weakness were the primary causes of the upward momentum in gold prices. The only drag was caused by investors' profit-taking and asset managers' portfolio rebalancing.

Record monthly inflows into gold-backed exchange-traded funds (ETFs) were the primary driver of the spectacular surge in gold prices. The inflows into gold ETFs had their best month ever. The 146 tonnes of inflows were worth $17.3 billion. The regions of Asia, Europe, and North America dominated the flows.

According to the WGC research, gold is a good short-term hedge against stock drawdowns and a terrific long-term diversifier. Given the abundance of supportive factors elsewhere, the trade group expressed confidence that gold will keep its ground and possibly receive further elevation should equities undergo a slump. According to WGC, only a significant liquidity crisis may cause both gold and stocks to plummet.

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POLL

Given gold’s strong run this year, what is its likely future role as a hedge for investors?

A) Still a reliable hedge — Gold will continue to protect against inflation and equity downturns

B) Moderate hedge — Gains may stabilize as investors rebalance portfolios

C) High-risk hedge — Overvaluation and possible profit-taking could limit near-term protection

Frequently Asked Questions

What factors have driven the sharp rise in gold prices?
The main drivers were strong options market activity, rising geopolitical tensions, and currency weakness, while profit-taking slightly tempered gains.
What role did gold-backed ETFs play in the price surge?
Record monthly inflows into gold ETFs — 146 tonnes worth $17.3 billion — were the key catalyst, led by demand from Asia, Europe, and North America.
How does WGC view gold’s investment value going forward?
WGC sees gold as a short-term hedge and long-term diversifier, expecting continued strength unless a major liquidity crisis causes both gold and equities to fall.