$3,000/oz and counting – where next for gold?

On Friday 14 March the gold spot price broke $3,000/oz.[1] As well as the psychological significance of a price ending with three zeroes, the development attracted attention because of the pace of recent price moves. Gold moved from $2,500 to $3,000 in 210 days, compared with the historical average of around 1,700 days to notch a $500 gain.[2]

We believe it’s important to put recent price moves in a longer-term context, and to focus on the underlying drivers of performance rather than short-term moves. In a recent video we explored the potential use cases for gold in a multi-asset portfolio, noting that the metal has long been a beacon of stability in uncertain times.

So far in 2025, this trend has continued, with ongoing geopolitical uncertainty in the Middle East and Ukraine bolstering gold's appeal as a perceived safe-haven asset.

US economic outlook darkens

Also adding to the appeal of gold is increasing wariness over the economic outlook for the US, raising expectations of a weaker dollar.

The Citigroup Economic Surprise Index, a measure of economic data surprises relative to market expectations, entered negative territory in March, suggesting that economic data releases have recently been underwhelming analysts’ estimates. Additionally, the Federal Reserve has trimmed 2025 US GDP growth expectations from 2.1% to 1.7%.

The recent shift to bearishness on the outlook for US equities was also reflected in investment flows that notably shifted out of US equities between February and March[3] amid concerns over the weakening economy, trade tensions and high valuations.

Central bank demand and investor flows have been constructive

Consistent demand from central banks has provided structural support for gold over the past few years. In each of the last three years, central banks have collectively purchased over 1,000 tonnes of gold annually.[4]

These large-scale central bank acquisitions, which came into focus following the onset of the Russia/Ukraine war, have undoubtedly contributed to the upward march of gold.

The gold futures market, meanwhile, has witnessed increased liquidity in 2025, with open interest rising by around 10% since the start of the year and picking up significantly in March (see below). Higher trading activity and increased flows into gold reflect strong investor demand and confidence in the metal.

Money managers are also showing heightened enthusiasm: in aggregate, they’ve been net long on gold 65% of the time since January 2020.[5] This positive positioning underscores growing sentiment in favour of gold.

Gold miners are a beta play for gold exposure

For investors seeking exposure to gold price movements, gold miners may be worth considering.

Historically, gold miners have demonstrated the ability to amplify changes in the price of gold due to their operational linkages. This tendency has been evident in the year to date, with the spot gold price rising approximately 13% and the Global Gold Miners Index delivering a gain of around 30%.[6] This demonstrates the potential for gold miners to experience outsized earnings growth when the gold price rises, which can result in significant returns for shareholders. If the price of gold falls, it’s important to note that this dynamic may reverse.

Looking forward to the second half of 2025, gold miners can boast double-digit earnings and growth expectations, reflecting optimism around sustained demand for gold. For those with a positive outlook on gold, investing in miners could be a tactical way to capitalise on current market dynamics.

Despite the pace of recent gold gains, we believe the longer-term outlook for gold and related assets will be supported if geopolitical instability and economic uncertainties persist, and central banks keep boosting demand.  

As investors navigate challenging times, gold and gold miners may continue to shine brightly.

 
[1] Source: Bloomberg spot gold price (XAU) hit US$3,000/oz in the morning of Friday 14 March.

[2] Source: You asked, we answered: Gold hits $3,000 – What comes next? | Post by Taylor Burnette | Gold Focus blog | World Gold Council

[3] Source: US stock market loses $4 trillion in value as Trump plows ahead on tariffs | Reuters

[4] Global central bank gold purchases: 2022 = 1080.01 tonnes, 2023 = 1050.81 tonnes, 2024 = 1044.63 tonnes. Source: Bloomberg as at 21 March 2025.

[5] Source: Bank of America research note as at March 2025.

[6] Source: Bloomberg as at 24 March 2025, prices in US dollar terms.