Crassus Investments Pty Ltd
Australia
4m
Gold has been one of the standout performers of 2025. Year to date, the price has surged over 50%, breaking through the symbolic $4,000 per ounce mark for the first time in history. What began as a steady climb early in the year has turned into a full-blown rally as investors respond to a mix of economic, political, and monetary tailwinds. The primary driver has been expectations of lower U.S. interest rates. With inflation stabilizing and economic growth slowing, markets have increasingly priced in Federal Reserve rate cuts. When rates fall, the opportunity cost of holding gold declines, making it more attractive compared to bonds or cash. This shift in expectations has been one of the most powerful forces behind gold’s rise. At the same time, the U.S. dollar has softened throughout the year. Because gold is priced in dollars, a weaker greenback makes it cheaper for buyers in other currencies, which has helped fuel global demand. Add to that persistent geopolitical risks and trade tensions, and the appeal of gold as a safe-haven asset has strengthened even further. Institutional and central bank buying has also been a major factor. Many central banks, particularly in emerging markets, have been diversifying their reserves away from dollars and into hard assets. The steady accumulation of gold by official institutions has provided a strong base of demand that continues to absorb supply and support prices. Technically, once gold broke through its previous highs, momentum traders piled in. Each breakout brought in new buying volume and forced short sellers to cover, creating a virtuous cycle of higher highs. We’ve seen some healthy pullbacks along the way, but each dip has been met with strong buying interest, suggesting that investors still view gold as an attractive hedge in an uncertain world. However, it’s not all one-way traffic. The biggest risk to the rally is a change in the interest-rate narrative. If the Fed signals a slower pace of easing or even pauses its cutting cycle, gold could correct quickly. A rebound in the U.S. dollar could also weigh on prices, particularly if global risk appetite improves and capital rotates back into equities. That said, the structural bull case remains intact. Governments are still running large fiscal deficits, global debt continues to grow faster than GDP, and real yields remain near historical lows. These conditions are ideal for gold, which thrives in an environment where confidence in paper assets is under pressure. Looking ahead, many analysts expect gold to remain firm into year-end, with potential for further upside if inflation expectations tick higher or if central banks continue their buying spree. The key levels to watch are recent consolidation zones, as holding those would signal that the market is building a new base above previous resistance. All in all, 2025 has reinforced gold’s role as the ultimate hedge in a world of policy uncertainty and monetary excess. The trend remains your friend, but discipline will be key as volatility increases near record highs. I have positioned the fund's cash in $GOLD for some time and it remains a high weighting. Kind regards Benjamin
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