Gold Outshines All Primary Asset Classes in Performance
Gold Outperforms Major Asset Classes in 2025
Gold's performance in 2025 has been exceptional, outshining a majority of other asset classes. This outperformance can be attributed to several key factors, including rising core inflation expectations, a weakening US dollar, heightened geopolitical and policy uncertainty, robust central bank buying, and sustained safe-haven demand.
The US dollar has depreciated by 10.7% year-to-date, making gold more attractive to non-USD investors. Persistent geopolitical tensions and trade uncertainties have reinforced gold’s role as a defensive asset amid market volatility. The ongoing global instability and fiscal concerns, including the US debt trajectory and policy uncertainty, continue to underpin sustained demand for gold as a strategic hedge.
Investors are repositioning in anticipation of Fed rate cuts in the second half of 2025, further boosting gold’s appeal. Central bank purchases of gold remain robust, making it the second-largest reserve asset globally.
The Invesco Q2 2025 Gold Report found that gold has delivered returns significantly ahead of both riskier equities and more defensive fixed income assets this year. Gold has outperformed every major asset class this year, with a 25.9% year-to-date (YTD) increase and a 5.7% gain in Q2 2025.
J.P. Morgan projects gold prices to average around $3,675 per ounce by late 2025, with potential to reach $4,000/oz by mid-2026, reflecting the bullish outlook driven by these structural and geopolitical factors.
In summary, gold’s outperformance in 2025 is underpinned by anticipated rate cuts and inflation concerns, a weakened US dollar enhancing value for global investors, heightened geopolitical and policy uncertainty driving safe-haven demand, robust central bank buying and sovereign demand, and structural fiscal and economic risks globally reinforcing gold’s attractiveness as a hedge.
Personal-finance advisors suggest that considering gold as an investment in 2025 could yield substantial returns, given its outperformance of major asset classes. In line with this, diversifying one's investment portfolio to include gold, particularly in times of geopolitical and policy uncertainty, might potentially strengthen personal-finance positions.
