Gold hit an all-time high this week, reaching $3,819 per ounce — and, for the first time in half a century, topping its 1980 peak in inflation-adjusted terms.
The yellow metal is now up 45% this year, making it by far the best-performing asset class of 2025, outpacing Wall Street’s crown jewels, including the Magnificent 7 (Mag 7) and bitcoin.
Although the gold craze is making its way into the mainstream, central banks remain the biggest whales in this cycle.
“Gold is driven by central banks from around the world, particularly those in emerging markets — Russia, China, and India — buying gold to hedge their currencies versus the dollar,” said Oppenheimer chief investment strategist John Stoltzfus.
Compared to the previous decade, annual central bank purchases have more than doubled. But while pundits pin this entirely on Trump, the trend has been in the making for years.
In fact, the first wave of large-scale buying began in 2022 after the West froze Russia’s reserves, convincing autocratic governments to buy gold as a way to diversify away from the dollar. Net purchases have risen again since the election, but they’re still nowhere near the levels seen back in 2022.
This central bank hoarding is adding up. For the first time since 1996, central banks now hold more gold than Treasuries, and gold has overtaken the euro as the second-most held reserve asset worldwide.
Another interesting phenomenon is that emerging market central banks are starting to buy directly from local mines instead of through international over-the-counter markets, bypassing the need to stockpile dollars.
“You’re able to grow your reserves using local currency and therefore not sacrifice another reserve asset [the U.S. dollar] to build your gold reserves,” said Shaokai Fan of the World Gold Council.
Interestingly, emerging markets aren’t the biggest buyers this year, at least not by official numbers. While many point to Xi Jinping and Putin as top hoarders, the crown actually goes to Poland.
The country’s central bank has added 67 tonnes so far in 2025, nearly doubling its reserves in just three years. Poland now holds more gold than the European Central Bank as a hedge for its monetary independence.
“Why does the central bank own gold? Because it retains its value even if someone cuts off the supply to the global financial system. Of course, we do not assume that this will happen. But, as the saying goes, fortune favors the prepared,” said National Bank of Poland chief Adam Glapiński.
Commodity analysts say the next leg up could come from private investor FOMO as part of the classic feedback loop of higher prices, louder headlines, more demand, and back to higher prices again.
Last week, gold-backed ETF inflows in North America hit their highest level since March 26, but analysts say there’s still plenty of upside if you stack gold ETFs against bitcoin.
For example, U.S. bitcoin ETFs make up about 7% of bitcoin’s total market cap. For gold ETFs, the ratio is still under 1%, according to ETF Action founding partner Mike Akins.
On the flip side, fund managers now rank gold the second-most crowded trade after the Mag 7, according to a recent Bank of America survey. The trillion-dollar question is whether this is first-inning crowded or ninth.
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