Gold Craze Overheats, Downside Corrections Ahead?

Gold has performed exceptionally well in 2025. The yellow precious metal has outpaced many asset classes globally, surging around +60% this year to surpass the $4,000 mark for the first time in history.

So far, the 8th consecutive quarterly gain in gold prices marks the third-longest winning streak on record, trailing only the 12-quarter and 9-quarter rallies in 2009–2011 and 2019–2020, respectively.

A prolonged US government shutdown and opportunistic buying from investors (i.e., ETFs) have added another layer of momentum for gold this month, pushing its price to around $4,200.

However, as gold is currently in overbought territory with a strong technical resistance level at $4,300, potential downside corrections and a pause in momentum seem likely in the near term.

Nevertheless, structural expansionary fiscal & monetary policies globally, policy decoupling and political divergence (i.e. US-led trade war) remain supportive for gold over the long run.

In turn, these factors have fuelled currency debasement, diversification from USD and stagflation risks, which are also partly influenced by the debt-fuelled government spending on unproductive assets.