Gold Hits New All-Time High Over $3,500 – Solomon Global Analyses What’s Next
The gold spot price has increased an astounding 43% in a year. On September 2nd, 2025, the precious metal surged past its previous record of $3,500, which it had hit on April 22nd of this year, to print a new ATH of $3,540. This was quickly broken the following day with an intraday high of $3,578. The gold price in GBP terms has similarly broken its all-time high and currently sits at £2,645.27, up from its £1,900 level just a year ago. To put this rise into perspective, the FTSE 100 has returned 9% over the same period, which, whilst considerably outpacing the returns of high street savings accounts, is dwarfed by gold’s gains.
Confluence of Macroeconomic Factors Boosts Gold’s Appeal
This historic run is underpinned by many constituents, including what Solomon Global analyst Nick Cawley describes as a “confluence of macroeconomic factors,” which currently include a weaker dollar, mounting expectations of a Fed rate cut in September, and ongoing concerns regarding persistent inflation. Fed Chair Jerome Powell, at his Jackson Hole speech, indicated that current monetary policy may be restricting economic activity and acknowledged that “risks to inflation are tilted to the upside, and risks to employment are to the downside — a challenging situation.” The World Gold Council, in its August monthly review, also highlighted growing apprehension about stagflation.
Additionally, Trump’s firing of Lisa Cook has stirred Fed independence fears and introduced yet more economic instability. As Nick Cawley notes: “The convergence of dovish Fed policy, institutional uncertainty, and persistent inflation concerns creates the ideal macroeconomic backdrop for a further precious metal rally.”
The picture this side of the pond is no less worrying, with UK inflation remaining stubbornly above the Bank of England’s target and the economy ‘stuck in first gear.’
Geopolitical Uncertainty Not Abating
There is sadly no end in sight for the major conflicts shaking the world. Russia continues extensive assaults on Ukraine, including air attacks on the capital Kyiv. Meanwhile, Israeli military efforts are intensifying in Gaza as it declares Gaza City a ‘combat zone’ and mobilises tens of thousands of troops.
China, unveiling its latest weapons and showing its artillery muscle at the 2025 China Victory Day Parade with Putin and Xi as guests of honour, is also doing nothing to quell global unease.
Central Banks and Gold
Central banks remain a key driving force in gold’s ascent as they continue to diversify away from dollar-denominated assets. As macro strategist Otavio (Tavi) Costa flagged, for the first time in almost 30 years, foreign central banks are holding a larger share of their reserves in gold rather than in U.S. Treasuries. At the Master Investor Show, veteran market commentator, Clem Chambers, stated that ‘gold is for war’ and this is the reason that governments stockpile it; a message he has re-iterated since.
What Next for Gold? Goldman Sachs Eyes $5000, as Bank of America is Latest in a Raft of Financial Institutions to Raise Forecasts
Solomon Global, contributing analyst Nick Cawley, highlights how gold is now testing new highs to determine where buyers and sellers meet (price discovery) and says that with little selling pressure present, the precious metal is poised to head higher: “a move to $3,750/oz this year cannot be discounted.”
Meanwhile, Goldman Sachs, on September 4th, said gold could hit $5000 if Trump undermines the Fed; a bullish statement that swiftly followed Bank of America raising its gold forecast. The banking institution behemoth expects the precious metal’s price to reach a record $4,000 an ounce by the first half of 2026.