Gold has broken 53 records, while experts are arguing about a "bubble". What does this mean for an investor

In 2025, the global gold market faced an unprecedented increase in demand and prices — the precious metal updated dozens of historical highs, and the total volume of purchases exceeded 5 thousand tons for the first time. Everyone is buying up gold — in the last year alone, Russians have purchased about 70 tons. Against the background of increased interest in precious metals and a modest supply, the industry is beginning to produce paper surrogates. Izvestia figured out how not to overdo it as an investor, why invest in gold and what is happening in the market — a speculative bubble or a fundamental deficit.

What happened to the market last year

- On January 29, the World Gold Council presented a report with basic data on precious metals for the past year. It turned out that the price of gold set 53 new records, the average cost in the fourth quarter was $4,135 per troy ounce (+55% YoY), and the average annual price reached an all—time high of $3,431 per ounce (+44% YoY). At the same time, on January 30, gold and silver fell by a record amount in many years. Gold lost more than 10% in price, falling below $5,000 per ounce. The collapse during the trading session was the largest since the global financial crisis.

- For the first time in history, the total demand for gold exceeded 5,000 tons. This volume of metal is estimated at an unprecedented amount of $555 billion (an increase of 45% year-on-year). Increased investment activity played an important role here: gold reserves in global exchange—traded investment funds increased by 801 tons, the second largest annual increase in history. And the increase in demand for the purchase of metal in bars and coins has become a record over the past 12 years — 1.4 thousand tons.

- Russia remained one of the largest countries in terms of gold consumption by the end of the year (among the top ten). The Russians bought more than 70 tons of physical gold — in the form of ingots, coins, jewelry. This is a scale comparable to the purchases of individual central banks. At the same time, there is no accurate official data on total private ownership in Russia, but there is reason to believe that the population owns approximately 600 tons of physical gold. This is more than the gold reserves of dozens of countries — Poland, Portugal, Spain, Austria, in particular.

Is it possible to talk about a "golden bubble"

- The question of whether there is a "gold bubble" is raised every time the price of the metal goes up too fast (in January it exceeded $ 5,000). A bubble arises where an asset is bought not because it is needed, but because it can be resold for more, the price lives by expectation, not reality. The opposite is happening in gold now — the main demand is driven by the desire to reduce risks. This, given the limited resources, makes talking about a bubble premature.

- There is not much physically mined gold in the world — about 200 thousand tons, potentially about 60 thousand tons more can be "extracted". In recent years, the volume of production has been around 3.6-3.7 thousand tons. Most of the gold is already in stable possession and has not been sold for years, meaning the market does not live by "flow", but by redistribution. The precious metal, which is used in industry and technology, is considered dispersed — it physically exists, but is almost economically unavailable. As a result, there is less gold than it seems, which is why even a relatively small additional demand can move the price.

- Over the past year, the crypto giant Tether Holdings has become one of the notable players in the global gold market. In January, it became known that he was storing approximately 140 tons of precious metals worth about $24 billion in a secure Swiss vault. This is the largest stock outside of central banks, ETFs, and commercial banks. Tether (based in El Salvador and issues the world's largest stablecoin USDT with a capitalization of $186 billion, as well as the gold stablecoin XAUT) is buying gold at a rate of 1 to 2 tons per week and is going to keep this pace for several more months (according to Bloomberg estimates, stocks increased by 70 tons over the year). The company is going to compete with banks in metal trading.

- Tether belongs to the so-called trust buyers. These are not investors in the classical sense and not speculators, these are issuers whose balance sheets should inspire confidence. They accumulate physical gold so that there is a solid asset under the promises. Such large purchases are a noticeable additional burden on the physical market: due to the fact that the company regularly purchased large volumes, the available supply decreased, especially in narrow segments of physical supply. The rest of the growth in interest in gold is driven by demand from central banks, investors, and ETFs.

- Taking into account the record demand of 5,000 tons and the slowly growing supply (+1% per year), the desire to own gold is growing rapidly. There is a structural deficit. In an environment where there is not enough real metal for everyone, the industry is starting to produce surrogates: paper gold, derivatives, funds, notes and accounts that do not involve direct ownership of a physical asset. This is not a sign of a bubble, it is a sign of tension in the system.

How, when, and what to invest in

- There is one mistake that almost all beginners make, thinking that gold is a way to make money. In fact, it's a way to save capital when everything else is losing value and credibility. The gold market does not like fuss, it does not reward speed, but endurance.

- The mechanics are as follows: gold grows for a long time and boringly, then accelerates sharply, market newcomers rush in, the price overheats, followed by a painful correction (minus 20-30%), then everyone starts talking about a bubble and the end of an era. Casual investors sell the metal in a panic, while long-term holders start buying it up, perceiving the price drop as a discount. The gold market is ruthless towards the impatient, redistributing the asset in favor of those who know how to wait.

- The real function of a safe haven asset is to survive a change in rules, to maintain the form of capital when the usual pillars begin to wobble. Therefore, it makes sense to invest only in those forms of gold where the investor owns the asset, not the promise. Bullion and investment coins operate here, they exist independently of banks, brokers and regulators. A compromise option (as part of the portfolio) may be an exchange-traded spot metal. This is a physically backed instrument — when gold is purchased through an exchange (you can use a brokerage application), it is accounted for and stored in the vault. The tool gives you control, flexibility and transparency, and allows you to hold metal without banking "magic" and without futures tricks.

- You shouldn't go to a place where they sell the promise of gold instead of gold itself. Impersonal metal accounts, structured products, smart notes and other beautifully packaged solutions exist not to protect capital, but for the convenience of the seller. You almost always pay for simplicity, spread, and the illusion of ownership.

- The same applies to attempts to "hold" gold through futures or derivatives. They are designed for price trading and risk management, not for storing value. This is a different level of the game, and it rarely ends in favor of those who come without experience and discipline.

- The best time to buy gold almost always looks psychologically unpleasant. These are periods when the price has already fallen. Then gold stops being fashionable and becomes a quiet asset for a long time again. The worst time to enter is when everyone is discussing new price peaks and there is a fear of being left out.

- Going out of gold, contrary to expectations, is almost unnecessary. They don't buy it for profit-taking. It is kept, its proportion is reduced or increased, shifted from one form to another. Gold is not a deal, but a fortune.

The theses contained in the text are not an investment recommendation, but the opinion of the editors.