March showed that gold has not lost its position in the eyes of investors. On the contrary – the gold market experienced another strong month, influenced by both geopolitical tensions and increased interest from central banks, institutional investors, and private investors. In this review, we summarize the market developments for gold in spring 2025.
Gold price breaks boundaries – $3,000 milestone exceeded
In March, the price of gold rose above the $3,000 mark for the first time in history. The background to this is increased uncertainty in world markets – particularly as a result of U.S. economic policy and Donald Trump's tariff policies. For example, the Economic Policy Uncertainty index, which measures global economic policy uncertainty, reached its highest reading ever at the turn of the year. (Kauppalehti, 15 April 2025). Gold is now seen more strongly than ever as a safe haven for investors, providing protection against inflation and market turmoil. An increasing number of investors – both private and institutional – have shifted their assets toward gold.What is driving the price?
According to Kauppalehti, the key background factors are:- Artificial monetary policy of central banks and high levels of debt
- Geopolitical uncertainty, such as the massive tariffs announced by the USA for nearly all of its trading partners
- Inflation fears: Tariff policies are expected to accelerate inflation
- Investors' safe-haven reaction: Gold is seen as a countermove to stock market volatility and uncertainty in fixed-income investments
Billions flow into gold ETFs – a sign of strong investor confidence
According to the World Gold Council's April 2025 ETF report, $8.6 billion in new capital flowed into physically backed gold ETF products in March. The total inflow for the first quarter rose to $21 billion (equivalent to 226 tonnes of gold)—the second-highest level since the pandemic year of 2020.- North America and Europe’s share: 83% of ETF inflows
- Assets Under Management (AUM): Rose to a new record at the end of March – $345 billion
The logistical flow of gold is changing
According to Reuters, physical gold flows also indicate changes in demand: In March, Switzerland imported as much as 25.5 tons of gold from the United States – significantly more than before. Exports to the USA, on the other hand, fell by 32%. This suggests that investors are preparing for potential trade policy disruptions and are moving physical gold to safer locations.Gold mining companies – share prices still lagging behind the price of gold
Mining companies are a different investment target compared to traditional gold: The industry is capital-intensive. Prices move with leverage and volatility is higher. Although the price of gold has risen significantly, many gold mining company stocks have not yet followed suit, indicating room for growth. According to Kauppalehti, mining company stocks are currently historically undervalued relative to the price of gold, and the overall value of the sector relative to the entire stock market is exceptionally low.Outlook: Where is the price of gold headed?
In April 2025, the price of gold has risen to a historic high – over $3,300 per ounce. Market uncertainty, the expected decline in interest rates, and growing investor interest in safe havens have led several major banks and analysis firms to revise their forecasts upward.Bank of Americahas presented a scenario where the price of gold could rise to $3,500 over the next two years if investor demand increases by 10% and central banks significantly increase their gold reserves. As its official forecasts, the bank maintains an annual average of $3,063 for 2025 and $3,350 for 2026.Goldman Sachsestimates that the price of gold could rise to $3,700 in the base scenario by the end of 2025. In their optimistic – so-called "bullish scenario" – the price could climb as high as $4,500 if economic recession risks materialize and central bank stimulus continues longer than expected.UBSholds a forecast of $3,500 per ounce for 2025. According to the bank, key drivers are central bank purchases and a weakening U.S. dollar, both of which support the price of gold in the coming months.
Summary
From the perspective of the gold markets, the essential question is whether the price remains at these levels—and whether the buying frenzy of central banks and ETF investors continues. If these trends hold, there may still be room for gold to rise.March 2025 demonstrated that gold's status as a safe haven in the investment markets is not just a historical truth—it is a current reality. Uncertainty, inflation expectations, and political upheavals are driving investors toward gold ETFs and physical gold.
Gold mining companies, on the other hand, still offer potential, especially for those investors who believe the price of gold will remain high. If costs are kept in check and demand stays strong, promising times may lie ahead for the companies' shares.
Gold.org: World Gold Council – Gold ETFs: March 2025 flows Kauppalehti: Kauppalehti: Safe haven climbs to new heights again – These stock market precious metal companies may still see a price rally ahead (April 15, 2025)
Markets Insider: Gold Hits New High Following Fed Chair's Stark Tariffs Warning - Markets Insider
Reuters: Gold starts coming back to Switzerland from the US after exclusion from Trump's tariffs | Reuters
