Has gold peaked?

While 2025 has gotten off to a bad start for digital assets, particularly Bitcoin, and major US indices such as the S&P 500, Nasdaq, and Dow Jones, the gold story is quite the opposite. The XAUUSD chart has already surpassed the $3,000 mark, a level that some analysts had predicted by the end of this year.       

This begs whether there is still room for growth and, if so, what could drive it. 

To answer that, we first need to understand why the demand for safe-haven securities is so strong. And one important factor is rising geopolitical tensions. Despite Trump's election promise to end wars, the reality is quite the opposite: geopolitical conflicts have intensified, leading investors to seek the safety of gold.    

Starting with the conflict in Ukraine, there is talk of preparing a ceasefire, but the positions of the sides remain too far apart, making it seem that a resolution is impossible, almost as if no one has heard of the concept of game theory. We will see how today's phone call between the U.S. and Russian leaders plays out.      

As for the Middle East, over the weekend, the United States launched a large-scale operation against the Houthi rebels in Yemen following their attacks in the Red Sea. Later, Trump declared that from now on, any attack against the Houthi would be considered an Iranian act, with corresponding consequences.     

In response, Iran warned that any act of aggression against Tehran would carry “grave consequences.”     

But that's not all. After an extended cease-fire, the Israeli Defense Forces announced that they were carrying out “massive attacks against Hamas targets in Gaza.” Peace talks have gone nowhere, and even Trump's threats have failed. Meanwhile, tensions have risen on the Syrian-Lebanese border. 

The icing on the cake: Trump's trade wars, which threaten to slow down the global economy and boost inflation, also gave gold a boost, as markets don't like uncertainty. The worst part is that we haven't even seen the full implementation of all the plans.  

In short, hopes that 2025 could be a year of peace are rapidly collapsing. Against this backdrop, the rise in gold prices seems quite justified, and unless tensions cool unexpectedly, the trend could continue. 

As for factors that could hold back gold, at least one-third of the demand comes from jewelers; however, due to rising gold prices, jewelers have recently reduced their purchases. If central banks decide to cut back on their gold purchases as well, as is already happening, the gold market could suffer a correction.