Can the Gold Bull Keep Up This Pace? - April 20, 2025

Gold’s record run has been nothing short of astounding, and it appears the bulls have plenty of strength left in them.

Since the beginning of the year, the price of gold is up by over 25 percent. That’s on top of a 26.5 percent increase in 2024. The yellow metal is by far the best-performing asset of this year.

As for this week’s market action, with markets now closed due to the Good Friday holiday, gold added another $90 this week to close at $3,341 an ounce. That’s a 2.8% increase on the week. Silver’s gain is more muted. It checks in at $32.75, up 25 cents or 0.8% for the week.

Platinum gained 2.4% and closed at $987, while palladium was the biggest winner among the precious metals. The industrial metal leapfrogged its cousin platinum to close at $992, a 4.4% advance since last Friday’s close.

Please note that despite the fact that markets are closed now for the week, Money Metals will be operating during normal business hours both today and on Saturday.

According to Metals Focus, “considerable” fresh inflows from institutional investors have been a major factor in the latest leg of the gold bull run. We see this trend in significant flows of gold into ETFs. According to the latest data from the World Gold Council, gold-backed funds accumulated 226 tonnes of gold in the first quarter, the largest quarterly increase since the third quarter of 2020 at the height of the pandemic shutdowns.

In fact, ETF demand has been strong across all regions -- and while Western investment continued to dominate global ETFs, demand has ramped up in China and India as well.

According to analysts at Metals Focus, the bull run still has plenty of momentum behind it.

However, despite these rising investment inflows, investor gold allocations remain below levels seen at the height of the pandemic and well below the Great Recession.

Higher gold prices have created some headwinds in the gold market, though, particularly in jewelry demand. Metals Focus analysts argue that this market tightness will eventually ease.

So, what is driving this gold bull market? The simple answer is the trade war and the uncertainty that comes along with it.

But it’s important to remember that gold started climbing long before President Donald Trump moved into the Oval Office, and there are other factors in play, including de-dollarization, geopolitical instability with military conflicts in Ukraine and the Middle East, and inflation worries.

However, tariffs are currently in the spotlight. President Trump’s hardline trade policies have rekindled fears of stagflation, which subsequently led to a sharp pullback in U.S. equities.

Federal Reserve Chairman Jerome Powell even raised the specter of stagflation during a speech earlier this week.

It’s interesting to note that gold was the last safe haven standing during the stock market rout last week. Other haven assets, including bonds and the U.S. dollar, have not fared well.

Monetary easing has also created tailwinds for gold. Central banks in India, New Zealand, and the Philippines all cut rates last week, and the European Central Bank delivered another cut this week.

While the Federal Reserve has held rates steady, the markets have priced in three rate cuts this year. That assumes no major economic meltdown. If the economy crashes, as many now expect, the U.S. central bank will almost certainly slash rates to zero and relaunch quantitative easing, unleashing another tidal wave of inflation.

Central bank gold buying has supported this gold rally from the beginning. Central banks globally have added over 1,000 tonnes of gold to their reserves for three straight years. To put that into perspective, central bank gold reserves increased by an average of just 473 tonnes annually between 2010 and 2021.

Metals Focus said it is too early to forecast a recession, but it doesn’t seem to be factoring in the bubble economy blown up by the Federal Reserve's monetary policy into its analysis.

Keep in mind that while the overall environment is extremely bullish for gold, it won’t likely be a ride straight up.

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