Gold prices have surged to unprecedented levels in 2025, breaking multiple historical records and igniting a wave of investor interest worldwide. Earlier this year, gold shot past the US$3,500 (approximately S$4,800) per ounce mark, a feat not seen before, prompting questions about whether the precious metal is heading towards a bubble or remains a safe haven amid global economic uncertainty.
Market Fluctuations and Influences on Gold Price
After hitting all-time highs, gold prices saw a sharp drop following renewed tariff talks between the US and China, with futures falling over 3% and slipping below the US$3,300 mark. Despite this volatility, gold remains on an upward trajectory, fuelled by expectations of interest rate cuts by the US Federal Reserve and sustained buying by central banks, particularly from Asia.
In 2024, gold gained nearly 29% as investors sought refuge from inflation and geopolitical tensions. The World Gold Council noted that the metal hit record highs 26 times in the first half of 2025 alone, underscoring a strong bullish sentiment in the market.
Analysts’ Perspectives: Bubble or Safe Haven?
While some investors worry about a gold price bubble, leading financial institutions remain largely optimistic. Citi Group, which previously forecast a peak in demand in late 2025, has recently raised its gold price targets, citing ongoing inflation worries, a weakening US dollar, and geopolitical risks like the conflict in Ukraine as key drivers pushing gold prices higher.
Morgan Stanley predicts gold could surpass US$4,000 (around S$5,500) per ounce by 2026, supported by continued purchases from central banks and investors worldwide. However, analysts warn that sudden shifts in central bank buying patterns could pose risks to the market.
Industry experts like Mr. Seah Tak Ming, Director at Precious Metals Holdings, believe that despite gold’s high price, the fundamentals remain strong, reducing the risk of a bubble burst. He points out that geopolitical tensions, inflation, and the trend away from the US dollar underpin gold’s appeal as a stable asset.
Conversely, Dr. Wong Kam Wing from the Business and Finance Faculty at a Malaysian university suggests that gold has always exhibited bubble-like characteristics because its value is based more on collective trust than intrinsic productive capacity, unlike stocks or bonds.
What This Means for Singapore Investors
For Singapore investors, the soaring gold prices highlight both opportunity and caution. Gold remains a popular hedge against inflation and currency fluctuations in volatile times. However, market watchers recommend careful portfolio diversification and keeping an eye on global economic signals, including Federal Reserve policy moves and geopolitical developments.
As gold continues to command attention, investors are advised to stay informed and consider both short-term fluctuations and long-term trends when making investment decisions.