Gold instead of dollars: why the whole world is buying precious metals
Gold prices have broken all records this year. Even the most optimistic expectations from the precious metal were thrown off by the real dynamics of the markets. The main driver of the rapid growth was the growing demand from central banks, which are ready to purchase gold even in conditions of prohibitively high prices. In addition, such a sharp rise in the precious metal may be a symptom of the hidden depreciation of most fiat currencies. Interestingly, this year, gold was followed by much less stable silver, which also set a number of impressive records. Why the most important investment metals are experiencing a rally unprecedented in history and how long it can last — in the Izvestia article.
The "Barbaric relic"
As recently as 20 years ago, gold prices adjusted for inflation reached lows in many decades. The press basically buried the precious metal, speaking about it in the language of the famous economist John Maynard Keynes, who called it a barbaric relic from the past. By the end of 2025, although in fact much earlier, it became clear that such opinions were becoming a relic from the past. Since the beginning of the 21st century, gold has demonstrated the best returns among all assets, adjusted for inflation (an average increase of more than 7% in real terms).
Even in the early 2020s, gold was quite expensive by historical standards, being near the $2,000 per troy ounce mark - four times more than in the mid—noughties. Moreover, no one could have expected that it would more than double in the next five years. Quite characteristic is the dynamics of forecasts from the largest investment bank Goldman Sachs, which is considered very optimistic about the prospects for precious metals. So, in the first half of 2024, bankers estimated the potential of gold by the end of 2025 at $2,890 per ounce. In January, the year-end target was moved to $3,100, and by May, the forecast had increased to $3,700. As recently as autumn, when gold was already worth more than $3,750, he predicted a transition through $4,000 by the middle of 2026 and reaching $4,900 by the end of it.
The reality has exceeded all expectations. The December rally led to an increase in quotations to $4,500 on December 26. Reaching the aforementioned $4,900 forecast, which even a radical golden bull could not give for a year and a half, looks completely real for weeks, if not days.
In this golden race, central banks have remained the leaders in recent years. However, unexpected players appeared among them. Thus, by the end of 2024, the largest buyer of the precious metal among regulators was the Central Bank of Poland, which acquired 90 tons. The same thing happened in the first 10 months of 2025. Poland is again the leader here (80 tons), followed by Kazakhstan, Azerbaijan and Brazil. However, the indicators of China's actual purchases remain unclear, which may be higher than those of any of these countries.
It should be noted that silver, which for a long time remained as a "poor relative" of gold, has also soared in price this year. The silver ounce jumped by 160% in 2025, reaching $77. Although this is four times more than at the beginning of 2020, this indicator still cannot, unlike the golden highs, be considered a record adjusted for inflation — higher levels were reached in 1979 and 2011. Silver probably still has a lot to grow.
Volatility is high
Evgeny Goryunov, head of the Monetary Policy Laboratory at the Gaidar Institute, attributes the high demand for gold to investors' desire to place their funds in reliable assets (or in those that are perceived as reliable).
— The basis of the global financial order has long been the dollar and the US financial market. U.S. government bonds were (and still are) the world's main safe asset, which did not lose value even during periods of crisis. There are no fundamental and objective reasons why this configuration of the global financial system must necessarily change," he points out.
However, as the expert notes, no one is immune from the human factor. The extravagant actions of the current US administration have already dealt a significant blow to confidence in the dollar system. What is only the "Liberation Day" worth when in the spring of 2025, President Trump announced the imposition of duties on goods from different countries and territories.
— Then we saw an increase in US bond yields and at the same time a weakening of the dollar, which clearly indicates a weakening of confidence in the US currency and the market. The index of economic policy uncertainty has consolidated at a level that was previously observed only during the pandemic period. It did not fall below 300, although before that it was mostly within 150," the Izvestia interlocutor states.
According to Goryunov, there is no good alternative to dollars, so demand is spreading across different markets and assets.
— The increase in the price of gold and, probably, silver reflects this trend. So far, there are no serious reasons why this trend should change, so the prices of precious metals will be high. But it is difficult to say whether they will continue to grow. The peculiarity of gold is that its prices are highly volatile. This is the contradictory nature of gold as an asset — it is perceived as a reliable asset, but in reality investing in it is very risky due to the high degree of uncertainty of its price," the expert concluded.
Gazprombank Senior analyst Igor Goncharov does not expect a significant increase in gold from the levels already reached.
— Firstly, the existing levels are already quite high. Secondly, central bank purchases have stabilized at about 1 thousand tons per year since 2022. Yes, this is a significant jump compared to the level before 2022 (about 500 tons per year), but no further growth is expected yet. Thirdly, interest from the jewelry industry, which remains the largest segment of demand, is noticeably decreasing amid rising prices.
The expert believes that at current prices, consumers are not ready to maintain the volume of purchases of gold jewelry at the same level. In addition, the main source of growth in demand for gold in physical terms — purchases from funds traded on the markets (ETFs) — is highly speculative and can quickly turn in the opposite direction if there is uncertainty about further growth in the price of gold, he explained.
At the same time, Goncharov believes that the current price of silver is too high.
— Based on historical patterns, the typical gold to silver price ratio is about 80 (1 ounce of gold costs the same as 80 ounces of silver). At the moment, 1 ounce of gold is worth about 65 ounces of silver. We expect this ratio to adjust," he notes.
Loss of trust and geopolitics
According to Finam analyst Alexander Potavin, gold will continue to be affected by a slight decrease in confidence in the United States and the resulting weakness in the US currency.
— The Fed has already lowered its rates three times this year. It is expected that this process will continue in 2026, which means that the dollar exchange rate may come under pressure, which will support the cost of precious metals, the expert predicts.
In addition, the analyst believes, geopolitical tensions will remain: by the end of this year, the only military conflict left is what is happening in Ukraine. However, cautious and long-term investors are not yet very confident that this phase of relative calm in the world will last long.
Potavin allows two scenarios for the development of the gold situation on the market.
— Base case scenario (more likely): we expect continued growth and a long-term exit to the level of $5,300-5,400 per ounce. Probably, the first target for the growth of gold quotes is the range of $4600-4800. In an alternative scenario (less likely), we may see the beginning of a correction in gold and the possibility of prices returning to around $3,600 per ounce," the expert says.
As for the increase in silver prices, as Potavin explained, there were two key drivers for growth: a structural shortage of the metal in the market and strong investment demand for it, which resulted from the resulting price increase.
— Silver is a critically important metal for green energy, in particular for the production of photovoltaic panels, electronics, electric vehicles and artificial intelligence technologies. Plus, the role of silver in the field of artificial intelligence and robotics is growing. Silver is indispensable in the production of electronics for robots of various purposes — from industrial to service and military. Against the background of this shortage of silver supplies in the physical market, investors now prefer to play for higher prices. Therefore, exchange—traded funds backed by silver show a strong influx of customer funds, which leads to an increase in the volume of silver reserves in these funds," concludes Potavin.
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