Gold prices in the local market rose by nearly 56% during 2025, while ounce prices on the global exchange recorded an annual increase exceeding 65%, marking the largest yearly gain since 1979. This surge was supported by a combination of monetary, financial, and political decisions that reshaped the global risk landscape, driving both investors and central banks to seek refuge in the yellow metal amid unprecedented economic uncertainty.
Saeed Embabi, Executive Director of the iSagha online gold and jewelry trading platform, said that local gold prices increased by EGP 2,090 over the course of the year. The price of 21-karat gold opened trading at EGP 3,740 per gram, touched EGP 6,100 on December 28—the highest level in the history of the local market—and closed the year at EGP 5,830. Meanwhile, the global gold ounce rose by about USD 1,694 during the year, opening at USD 2,624, reaching a record high of USD 4,555 on December 31, and closing trading on Wednesday at USD 4,318.
Embabi added that gold prices rose by 3.2%, or EGP 180, during December. The price of 21-karat gold opened the month at EGP 5,650 and closed at EGP 5,830, while global prices increased by approximately 2.4%, or USD 102, opening at USD 4,216 and closing at USD 4,318.
Gold achieved its best annual performance since 1979 in 2025, marking the third consecutive year of gains. This rise represents an escalation of a fundamental shift in global financial markets.
Gold in 2025… When Major Decisions Forged a Historic Rally
The sharp rise in gold prices during 2025 was not the result of a single factor or short-term speculation. Rather, it was the outcome of a series of monetary, financial, and political decisions that reshaped the global risk map and pushed both investors and central banks toward the yellow metal amid unprecedented economic uncertainty.
Since the beginning of the year, gold moved along a gradual upward path before transforming into a powerful rally that broke historical levels, driven by widespread uncertainty fueled by major decisions from global financial and political decision-making centers.
First: The U.S. Federal Reserve… A Decision to Wait Rather Than Act
One of the key drivers behind gold’s rise was the shift in the rhetoric and policies of the U.S. Federal Reserve. Throughout 2025, the Fed avoided providing a clear interest-rate path, adhering instead to a “wait-and-see” approach amid slowing economic growth and mixed inflation and labor market data.
This ambiguity created anxiety in markets, as investors became unable to accurately price real returns on financial assets. As real bond yields declined, gold found an ideal environment to rise, benefiting from its nature as a non-yielding asset that preserves value during periods of monetary uncertainty.
Second: Central Bank Decisions… Gold Instead of the Dollar
In parallel, 2025 witnessed the continuation of one of the most significant shifts in the global financial system: the acceleration of central bank gold purchases. Major central banks—led by China, Turkey, and several emerging economies—continued to strengthen their gold reserves at the expense of dollar-denominated assets.
This trend was not purely investment-driven but represented a strategic decision reflecting growing concerns over geopolitical risks, financial sanctions, and the use of the dollar as a political pressure tool. The result was the withdrawal of large quantities of gold from the free market, reducing available supply and providing strong price support.
Third: Geopolitics… Decisions That Fuel Fear
The year 2025 was not free from political decisions that heightened global tensions. From escalations in sensitive regional files to trade decisions and tariffs that revived the specter of trade wars, investors faced a world that was less stable and more vulnerable to shocks.
Reuters repeatedly described the environment as “ideal for safe havens,” as government decisions themselves became direct sources of risk rather than tools to calm markets. Under such conditions, gold returned to its historic role as a hedge against political and economic turmoil.
Fourth: The Dollar Under Pressure… A Market Verdict, Not a Policy One
In 2025, the dollar’s weakness was less the result of an official decision and more a judgment delivered by markets. Expanding U.S. fiscal deficits, rising concerns over public debt, and declining confidence in the monetary policy trajectory eroded the dollar’s momentum, directly boosting gold prices.
Bloomberg noted in several analyses that the weaker U.S. currency made gold more attractive to holders of other currencies, opening the door to broader global demand, particularly from Asia and the Middle East.
Fifth: Investors… The Decision to Flee Risk
At the investor level, institutions and investment funds made a clear decision in 2025: reduce risk and increase hedging. Strong inflows into gold exchange-traded funds, according to Reuters data, reflected a clear loss of confidence in the stability of traditional markets, whether equities or bonds.
With every mixed economic release and every ambiguous central bank statement, gold holdings increased, as it was seen as the only asset capable of standing outside the direct equations of monetary policy.
Rising Gold… and Persistent Uncertainty
The rise in gold prices during 2025 was less a historical anomaly and more a mirror of a troubled global environment. Indecisive monetary policies, debt-laden fiscal strategies, escalating geopolitical tensions, and central banks redefining the concept of reserves all converged to grant gold what resembles a “global mandate” to return to prominence.
As long as this uncertainty persists, analysts believe gold may not have completed its journey, particularly while major decisions continue to be driven by crisis management rather than certainty.
Gold Outlook for 2026… Conditional Upside and Continued Uncertainty
After an exceptional year in 2025, gold entered 2026 carrying strong momentum, yet facing a new phase characterized by greater institutional caution. While major financial institutions broadly agree that gold will remain at elevated levels, they differ on the pace of gains and the upper limits, amid a world still grappling with deep monetary and geopolitical uncertainty.
Reports from leading international institutions suggest that 2026 will be a year of consolidating the upward trend rather than one of sharp leaps—unless major shocks re-emerge. Several major investment banks believe gold has not yet peaked. Forecasts from institutions such as Goldman Sachs, Bank of America, and Société Générale reflect a conviction that central bank demand, combined with a relatively low interest-rate environment, could push gold to test unprecedented levels during 2026.
These views are based on the continued purchase of gold as a sovereign reserve asset—particularly by emerging economies—along with the belief that the U.S. Federal Reserve will be unable to fully return to a restrictive monetary policy without risking a broader economic slowdown.
Conversely, other institutions, including major European banks, adopt a more cautious outlook, suggesting that gold may enter a phase of price consolidation following the record gains of 2025. This scenario does not imply a sharp decline but rather anticipates trading within a high range, with intermittent new highs, especially in the first half of the year.
This cautious stance reflects the assessment that a significant portion of risks has already been priced in, and that further upside will require new catalysts, whether monetary or geopolitical.
Key Drivers for 2026
According to institutional analyses, gold’s trajectory in 2026 will be shaped by four main factors:
U.S. Federal Reserve policy and the clarity of the interest-rate path and real yields.
The pace of central bank purchases, now a long-term structural factor in the gold market.
The performance of the U.S. dollar, as any additional weakness provides direct support to prices.
Geopolitical and economic tensions, which remain a persistent source of uncertainty in markets.
Gold Between Hedging and Investment
In 2026, gold will not merely serve as a hedging tool; it will continue to function as a strategic component within investment portfolios, particularly for institutions that increasingly view it as a partial substitute for bonds in an environment of low real yields.
This shift in perception strengthens the likelihood that gold will remain at elevated levels, even if geopolitical tensions temporarily ease.
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