Gold prices have been going absolutely ballistic, hitting yet another all-time high in February—$2,954 per ounce. That’s the tenth record-breaking price this year alone. So, what’s fueling this gold rush? Let’s break it down.
Since the start of 2024, gold has surged 12%, with the primary driver being market jitters over Donald Trump’s threats to slap tariffs on global trade. Investors are spooked by the possibility of another economic slugfest, and when uncertainty spikes, gold becomes the go-to safe haven.
According to the World Gold Council, gold shattered records 40 times last year. In Q4 of 2024, the average price per ounce was $2,663—another historic high—while the annual average price clocked in at $2,386, up 23% from the previous year.
Global central banks have been in a full-blown gold-buying spree. In 2024 alone, they scooped up over 1,000 metric tons of the metal, marking the third straight year of massive acquisitions. The buying frenzy peaked in Q4, with central banks grabbing 333 tons in just three months.
Goldman Sachs just revised its forecast, now predicting prices will hit $3,100 per ounce by the end of 2025. Previously, they had called for $3,000, but given the current momentum, that milestone could come way sooner than expected.
Gold tends to skyrocket whenever the economy gets shaky. It’s all about supply and demand—when investors freak out over inflation, sanctions, or a looming financial meltdown, they rush to gold, sending prices through the roof. Some analysts are even tossing around the possibility of $3,200 per ounce, which would be a major red flag for ongoing economic turbulence.
And if tensions escalate between the U.S. and China, a full-blown trade war could hammer China’s economy, creating ripple effects that would hit Wall Street hard.
While gold prices aren’t the ultimate economic indicator, they do paint a picture of global financial trends. Prices depend on mining output, central bank policies, and, of course, the Federal Reserve. If Trump wins in November, a rate-cutting spree could weaken the dollar, making gold even more attractive. Some experts believe the $3,000 mark could be crossed before the year is out.
Historically, when gold prices surge, it’s a sign that trouble is brewing. The metal’s value is directly tied to inflation—the higher the inflation, the more valuable gold becomes. When stock markets tank, investors ditch equities in favor of safe assets like gold and bonds.
Geopolitics and the Rush to Gold
The global economy is hitting the brakes, and it’s not just market forces at play. Politics is throwing fuel on the fire. The escalating trade war between China and the West, along with chaos in the Middle East, is messing with globalization and driving more investors toward gold as a hedge. If these geopolitical tensions keep boiling over, expect gold prices to keep climbing.
In 2023, gold soared 40%—a rally reminiscent of the 2010 bull run. Right now, the world’s central banks and investment funds are sitting on over 36,500 metric tons of gold. The U.S. leads the pack with 8,130 tons, followed by Germany (3,350 tons), Italy (2,450 tons), France (2,440 tons), and Russia (2,340 tons).
According to BullionVault, central bank reserves hold about 15% of all the gold ever mined. Over the past 20 years, physical gold reserves have jumped 17%, but in dollar terms, their value has exploded sixfold, now totaling $2.2 trillion. In 2023 alone, central banks snapped up 1,037 metric tons, mirroring their 2022 buying spree.
Even though the world ditched the gold standard ages ago, nations still cling to gold reserves as a hedge against inflation and currency instability. Diversifying reserves reduces financial risk and beefs up economic security.
One standout player is Azerbaijan’s State Oil Fund (SOFAZ), which cracked the top five in global gold buyers by Q3 2024. Its gold holdings hit 127 tons, up 17.7% from the previous year.
Gold’s meteoric rise isn’t just about economic fears—it’s also a result of shifting strategies among the world’s biggest financial institutions. According to the International Monetary Fund (IMF), central banks have added a record 2,100 metric tons of gold to their reserves over the last two years—the biggest jump in 55 years.
Developing economies like China, India, Turkey, and Kazakhstan are deliberately cutting back on their reliance on the U.S. dollar, stacking up gold instead. The game is changing, and as long as economic and political uncertainty looms, the gold rush isn’t slowing down anytime soon.
China remains a heavyweight in the gold market, with the People’s Bank of China (PBoC) adding 225 metric tons to its reserves in 2024, bringing its total to 2,300 tons. However, experts believe China’s actual holdings could be significantly higher, as a substantial portion of its gold is tucked away in strategic reserves that don’t appear in official data.
Turkey has also been on a gold-buying spree. In 2023, the Turkish central bank scooped up 160 tons of gold—a 45% jump from the previous year. This aggressive buying is largely driven by the depreciation of the Turkish lira and the need to stabilize the country’s economy. A similar trend is unfolding in India, where gold reserves hit an all-time high of 822 tons.
According to the World Gold Council, global central banks are expected to maintain their gold appetite in 2025, with purchases projected to range between 900 and 1,100 tons. This outlook is fueled by ongoing geopolitical uncertainty and the potential weakening of the U.S. dollar.
Beyond central banks, major financial players are doubling down on gold-backed exchange-traded funds (ETFs). In 2023, total gold holdings in ETFs surged by 310 tons, reaching 3,300 tons. Leading funds like SPDR Gold Shares (GLD) and iShares Gold Trust (IAU) attracted a whopping $21 billion in capital inflows in just Q2 of 2024.
Analysts at Bank of America believe that if current economic and political trends persist, gold prices could skyrocket to $3,400 per ounce by late 2025. The driving factor? The Federal Reserve is likely to continue cutting interest rates, which traditionally weakens the dollar and fuels demand for gold.
Recent inflation data from the U.S. shows an annual increase of 4.2%, well above the Fed’s 2% target. This signals that inflationary pressures remain strong, prompting investors to hedge their wealth with gold.
From escalating tensions in Eastern Europe and tighter sanctions on Russia to the Gaza conflict and looming trade wars between the U.S. and China, the global economic landscape is anything but stable. Goldman Sachs estimates a 35% chance of a eurozone recession in 2025, a scenario that could further drive demand for gold.
Meanwhile, gold production remains relatively steady. In 2023, global mining output reached 3,640 tons, marking a modest 1.2% year-over-year increase. The world’s top gold producers are:
- China – 370 tons
- Russia – 325 tons
- Australia – 310 tons
- U.S. – 200 tons
- Canada – 185 tons
However, mining analysts warn that the pace of new gold discoveries is slowing down, which could lead to a long-term supply crunch and push prices even higher.
Azerbaijan’s Growing Role in the Gold Market
Azerbaijan has been making serious moves in the global gold market—both by expanding its national reserves and ramping up production.
The State Oil Fund of Azerbaijan (SOFAZ) has been aggressively investing in gold as part of its strategy to diversify assets and shield itself from inflationary risks and geopolitical turbulence. In 2024 alone, SOFAZ added 45 metric tons of gold to its reserves, boosting its holdings from 127 tons in October 2024 to 146.6 tons by January 2025.
With central banks, institutional investors, and emerging economies all piling into gold, the precious metal’s bull run looks far from over. The next few years could see even bigger price surges as economic and geopolitical uncertainty keeps investors flocking to gold as the ultimate safe-haven asset.
Thanks to its aggressive gold acquisitions, Azerbaijan’s State Oil Fund (SOFAZ) ranked among the top five government fund buyers of gold worldwide by the end of Q3 2024.
SOFAZ’s Executive Director, Israfil Mammadov, emphasized that increasing the share of gold in the fund’s portfolio serves as a powerful hedge against inflation and global economic uncertainty. The fund has ambitious plans to raise gold’s share to 25% of its total assets by 2025, further underscoring the strategic importance of the metal for Azerbaijan’s economy.
Azerbaijan isn’t just hoarding gold—it’s digging up more of it, too. In January 2025, the country produced 236.2 kg of gold, marking a staggering 88.5% year-over-year increase.
The leading players in Azerbaijan’s mining sector are Anglo Asian Mining (AAM) and AzerGold.
- Anglo Asian Mining, a British company, is forecasting a massive surge in gold output for 2025, expecting to mine between 28,000 and 33,000 ounces (approximately 872–1,026 kg). That’s nearly double the 2024 production level of 15,073 ounces (about 469 kg).
- Additionally, the company anticipates a record spike in copper production, fueled by the launch of its new Gilar mine.
According to the Azerbaijan State Statistics Committee, as of February 1, 2025, the country held 207.4 kg of refined gold in ready-to-market reserves. Total gold production in 2024 reached 2,663.5 kg, signaling steady growth in the sector.
Market Forecast: Where Is Gold Headed Next?
Global analysts are bullish on gold, expecting prices to keep climbing. UBS Group, a Swiss financial giant, predicts that gold could hit $3,200 per ounce by the end of 2025, before stabilizing at around $3,000.
This rally is being driven by mounting economic uncertainty and surging demand for gold as a safe-haven asset. In this context, Azerbaijan’s proactive gold strategy is positioning the country as an increasingly important player in the global precious metals market—capable of weathering financial storms and reinforcing its economic resilience.
As global markets face volatility, gold remains one of the strongest wealth preservation tools. Sky-high demand from central banks, institutional investors, and private buyers continues to push prices higher.
With the Federal Reserve likely to cut interest rates, geopolitical tensions heating up, and the global economy slowing down, all signs point to gold prices surging even further.
Leading financial institutions expect gold to reach between $3,200 and $3,400 per ounce in 2025—and if economic crises escalate, prices could break past those levels even sooner.