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Darling All,
Disclaimer: Please note this is not investment advice.
But you will need a large cup of caffeine!
Calling all Magpies and Goldbugs, Baroque Rocks has literally been a broken record on the rise of Gold and whilst one does feel somewhat vindicated that one called a rally correctly (especially one showing no signs of slowing) we thought we’d give you a quick update and to restate our favourite phrase: “whilst we adore bedecking you marvellous Magpies in treasure, we’re equally obsessed with adding a little shimmer to your IQ.”
Our last “Knowledge Drop” on Gold was in April (Q2 2025) and it had hit a record high of USD$3,500, so as we enter October (Q4, 2025) with prices now glinting around USD $4,037, here’s a breakdown of what’s driving the recent surge and why we’re still feeling brilliantly bullish.
What is Powering Gold’s Rise?
In short six drivers are powering gold’s surge: expectations of rate cuts, a weakened US Dollar; inflation worries / global uncertainty, central-bank and institutional buying, supply constraints and good old-fashioned FOMO (that age old adage: fear of missing out)!!!
1. Possible US Interest Rates Cuts & Looser Monetary Policy
Many investors believe that the US Central Bank (the Federal Reserve) will soon cut interest rates, which makes Gold more appealing since it doesn’t pay interest but holds its value. Mix in worries about the US economy and the dollar’s strength and Gold’s status as a safe-haven shines even brighter.
2. Weakening US Dollar and Global Reserve Diversification
Gold is priced globally in US Dollars, so when the dollar weakens, it becomes cheaper for buyers using other currencies boosting demand. At the same time, many nations such as the BRICS economies are reducing their reliance on the US Dollar and diversifying reserves in Gold and other politically safer assets. This broader shift towards “de-dollarisation” driven by rising geopolitical tensions has become another strong tailwind for Gold’s long-term aura of appeal.
3. Inflation, Economic Uncertainty & Geopolitical Instability
Rising prices and fears of inflation push investors towards gold to protect their wealth.
Add in global uncertainty, heavy government debt and ongoing geopolitical tensions (from Ukraine to the Middle East) and Gold becomes the asset of choice when the world feels unsteady. Simples!
4. Central Bank and Institutional Demands
Central Banks have been major buyers, boosting Gold reserves to reduce dependence on dollar-based assets in an increasingly contested global financial system.
China for example held 73.96 million fine troy ounces (worth USD $ 243.99 billion) as of July 2025. Russia’s holdings have surged in value by roughly 72% equating to USD $96 billion since 2022, interestingly this is mainly from price gains rather than any recent notable physical accumulation. On the Emerging Markets side: Eastern Europe, Asia and Middle East have been active buyers.
And at home dear old Blighty will be bitterly rueing the day that Labour’s Gordon Brown’s decided to flog off 395 tonnes of bullion for a paltry £2.6billion back in early 2000s!! A hoard that could have been worth today a rather delightful £38 billion – enough to give the new Labour government’s “magic money tree” a fighting chance at plugging its £90 billion black hole! But alas, the only thing gilded now is the regret!
Regarding Institutional demand, investors are providing record inflows into gold-backed ETFs (exchange traded funds, a cheap and popular investment vehicle used by both retail and institutional investors.) and funds further fuelling Gold’s momentum.
5. Supply Side and Structural Constraints
To put it into context, the total annual supply of global mine production (inclusive of recycled Gold) stands at only 2.500 – 3,000 tonnes a year. Mining is not only capital intensive but slow which in turn keeps Gold scarce. Therefore, Central Bank demand is meaningful relative to supply. According to the World Gold Council, Central Banks continued to treat Gold as a safe reserve asset snapping up 1,045 tonnes in 2024 and another 244 tonnes in Q1 of 2025.
6. Market Sentiment (“Animal Spirits” now known as FOMO)
As Gold’s momentum builds, the Financial Times recently cited the new phenomena of “gold plated FOMO.” Investors swept up by the fear of missing out, are rushing to join the rally adding yet another layer of frenzy to Gold’s ascent!
Current Forecasts from the Banking Titans
According to Reuters, JPMorgan (the alma mater of Baroque Rocks’ founder) envisages Gold glittering way past USD $4,000 by Q2 2026, with momentum building through late 2025! For context as we pen this on Wednesday 8th October 2025 Gold is already glistening gleefully at USD $4,037!!!
Not to be outshone Goldman Sachs echoes this sentiment by dropping a DJ-Sol* beatnik nugget that sees Gold at USD$5,000, should private investors divert just 1% of their US Treasury holdings into Gold. A move that could trigger another Gold rush if confidence in the Federal Reserve’s independence wavers.
Morgan Stanely’s CIO is now favouring a 60/20/20 portfolio by slicing bond exposure and adding Gold in its place. As the banking titans polish their projections one thing’s certain: Gold’s moment isn’t just shining it blinging blazing!!!
DJ-Sol*: better known by day as Goldman Sachs’s CEO, David Soloman; and even has his own label called Payback Records
The Final Gilded Word
As Dominic Frisby, the famed Goldbug and author of The Secret History of Gold, told Merryn Somerset Webb on a recent podcast Gold could well reach USD $7,000 an ounce. The world’s most ancient asset is firmly back in Vogue glittering at the coruscating crossroads of wealth, politics and power - aurum potestas est: Gold is power!
It has always been part economics, part emotion, a marvellous melding of logic and lustre. So, whether you Magpies see it as insurance, indulgence or inheritance, one thing feels aurum-ly certain – this rally still has a little more glitter left to give!
Stay sparkling!
With love from Emma and the Baroque Rocks Team
P.S. If you like what you read and it brings a smile, do spread the sparkle and share it with friends!
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