Gold has been experiencing a boom in recent years, but in 2025 the increases sometimes took the form of hyperbole. The quotations of the “barbaric relic” are supported by global economic uncertainty, armed conflicts and the weakening dollar. Around the world, queues of people willing to buy a gold coin or bar line up in front of physical gold sales points, and it is no different in Poland. But does buying gold at record prices make sense?
Since the beginning of 2025, gold prices have increased by over 50%. The increase was even greater – at the peak in October it exceeded 65%. In recent days, there has been a well-deserved correction in prices.
There are usually three main purposes for purchasing gold:
- “safe haven” – gold has been a safe haven in uncertain times for centuries. Nowadays, the price of gold is particularly sensitive to geopolitical tensions, wars and recessions. Gold does not earn interest, but it offers something more important – a sense of security in times of chaos;
- long-term investment – adding gold to your portfolio reduces overall investment risk thanks to its low correlation with other asset classes. Over the long term, the price of the bullion generally increases, providing hope for capital gains for patient investors;
- speculation – in a period of increased volatility, gold may also be an opportunity for speculators to make money not only from price increases, but also from price decreases, e.g. through futures contracts.
Many investors treat gold as an “anti-inflation” remedy. However, it is worth remembering that gold is not always able to beat inflation. Long-term analysis of gold prices reveals a clear cyclicality and shows that the precious metal responds to key macroeconomic factors and global phenomena. Gold has had periods of both greatness and stagnation over the last few decades:
- 1970s: era of inflation and oil shock. It was one of the strongest periods of the gold bull market. After the Bretton Woods system, which tied the dollar to gold, was broken in 1971 and in the face of high inflation fueled by oil crises, the price of the precious metal skyrocketed, reaching its peaks in the early 1980s. This was a classic example of gold reacting to the loss of confidence in fiat currencies and uncontrolled price increases.
- 1980s and 1990s: two decades of drought. After the Federal Reserve brought inflation under control and ushered in an era of high real interest rates, gold entered a long bear market. The opportunity cost of holding gold (which pays no interest) has become too high compared to bond yields. During this period, the price of gold fell from USD 850 to less than USD 300 per troy ounce.
- 2000-2011: great comeback. The downward trend in gold prices was reversed at the beginning of the 21st century and was driven by, among others, by global declines in real rates, the credit boom, the weakness of the dollar and, above all, the financial crisis of 2008. Gold then reached historic highs, proving its role as anti-crisis insurance in the face of the bursting speculative bubble and threat to the banking system.
- 2013-2023: consolidation and new peaks. After the 2013-2015 correction, the bullion began to gain again in the face of record central bank (QT) interventions, culminating in reaching new historic highs in response to the pandemic and global inflation in 2020-2022. It was a reaction to mass “money printing” and an unprecedented increase in public debt, but also to the war in Ukraine.
What is driving the increase in gold prices?
According to the latest data from the World Gold Council (WGC), total gold demand, including the OTC market, increased by 3% year-on-year in the third quarter of 2025 and reached 1,313 tonnes, the highest quarterly value on record. ETFs flocked to gold in the last quarter, purchasing a total of 221.7 tons, generating an increase of 134%. year to year, and central banks, purchasing a total of almost 220 tons, i.e. 10 percent. more year to year. However, the demand for bars and coins increased and amounted to 315.5 tons (+17% y/y).
– After the peaceful holidays in September, there was a very significant recovery, mainly caused by the geopolitical and macroeconomic situation in the world. In turn, October was an absolutely record month for the Mint of Poland in terms of revenues from gold sales. We were literally a few kilograms short of the quantity record – says Marta Bassani-Prusik, director of investment products and foreign exchange values at the Mint of Poland. The company is the only producer of investment gold in Poland and one of the three most technologically advanced mints in the world.
– An increasing number of customers come to us, but at the same time the purchases are increasingly smaller in weight. Due to the very high price of the metal in gram terms, the average basket is moving towards 10-20 g. A few years ago it was 100 g, then an ounce (31.1 g). What makes us particularly happy is the fact that our customers' attention is directed primarily to our own brand products. In recent weeks, bars have become more popular than bullion coins – adds Marta Bassani-Prusik.
The gold buying frenzy can be explained mainly by fundamental factors – the partial loss of importance (and value) of the dollar, as well as the growing geopolitical risk, which manifests itself not only in the war in Ukraine, major and minor skirmishes in the Middle East, but also in the form of the trade war between the US and China – the two largest economies in the world.
It is true that US President Donald Trump, after his last meeting with Chinese leader Xi Jinping, announced that the leaders “significantly de-escalated the trade impasse by essentially agreeing on a one-year ceasefire that will reverse retaliatory measures, including high tariffs and cutting off access to rare earth metals.” However, as long as Trump is in the White House, we cannot be sure of anything, because, as he has shown more than once this year, he can change decisions practically from one day to the next.
It is worth investing in gold systematically
In the context of systematic investing, the key is not to speculate on short-term price increases, but to consistently, long-term average the purchase price. Gold should be an element purchased for the investment portfolio regularly, regardless of current quotations, with a fixed allocation percentage. Experts most often indicate that the optimal share of gold in an investment portfolio is 10-15%. Gold is supposed to be an anchor, not an engine driving the rate of return of our portfolio.
– In normal times – when fluctuations in precious metal prices are not significant – we recommend keeping 5-15% of gold in your investment portfolio, depending on your age and risk appetite. In times of turmoil or crisis, that proverbial 5% can be worth more than the rest of your portfolio. This is the idea of a “safe haven”, which in difficult times works a bit like hedging – says a representative of the Mint of Poland.
In the face of global economic uncertainty, gold remains an irreplaceable pillar of a long-term portfolio. This is insurance that has no expiration date. Historical analysis indicates its cyclical increases in moments of weakness of currencies and markets, and the current macroeconomic and geopolitical prospects – especially the expected rate cuts by the Fed and further increases in gold reserves by central banks – rather support the continuation of the bull market.
An example is the opinion of Goldman Sachs analysts: “we believe that structural purchases of gold will continue and we still see the possibility of raising our forecast to USD 4,900 at the end of 2026 due to the growing interest in gold as a strategic tool for portfolio diversification.
[…] Many long-term investors, including: sovereign wealth funds, central banks and pension funds are planning to increase their purchases of gold as a strategic instrument for portfolio diversification. These investors usually operate based on multi-quarter cycles and multi-year horizons, which implies the possibility of raising our forecast.”
The publication's partner is the Mennica Polska.
