Gold Up 25% Since Early 2025 — Is $5,000/oz Next or Will Prices Crash?
Gold has been on a remarkable run. Since early 2025, the precious metal has gained over 25%, climbing from around $3,300/oz to its current level near $4,400/oz. It hit an all-time high of $5,595/oz in January 2026 — a level many analysts never expected to see this decade.
But after that historic peak, gold has corrected significantly. The question on every investor's mind: is this a buying opportunity, or the beginning of a major reversal?
The Bull Case — $5,000+ Is Coming
The structural argument for higher gold prices is compelling. Central banks have been buying gold at record rates — over 1,000 tonnes per year for three consecutive years. This institutional demand is not driven by speculation but by a deliberate shift away from US dollar reserves.
Meanwhile, the US national debt has surpassed $38 trillion, and the Federal Reserve faces a difficult choice: raise rates to fight inflation (which could crash the economy) or hold rates steady (allowing inflation to erode the dollar's value). Both scenarios historically favour gold.
The Bear Case — Correction Could Continue
On the other side, gold has already priced in a lot of bad news. The move from $3,300 to $5,595 in roughly 12 months was unprecedented. A full retracement to the 50% level would put gold back near $4,400 — which is roughly where we are now.
If the US-Iran situation resolves peacefully and oil prices fall, gold could lose its safe-haven premium. Additionally, if the Fed does raise rates, gold — which pays no yield — becomes relatively less attractive.
What the Numbers Say
- All-time high: $5,595/oz (January 29, 2026)
- Current price: ~$4,411/oz
- Year-over-year gain: +$1,102/oz (+33%)
- Q1 2026 average: $4,873/oz (new quarterly record)
- JP Morgan year-end target: $6,300/oz
Bottom Line
The medium-term outlook for gold remains positive, driven by structural demand. However, short-term volatility is high due to geopolitical uncertainty and interest rate risk. Investors should consider dollar-cost averaging rather than making large lump-sum purchases at current levels.
For Pakistani and Indian investors, remember that local gold prices are also affected by currency movements. Even if USD gold stays flat, a weakening Rupee will push local prices higher.