People often ask, is this the right price? Is it too expensive? Will it go up more? The questions sound sensible but are fundamentally misplaced.
Gold has been on a remarkable run in the last three years. Prices peaked at US$5,595 ($7,178) an ounce in January 2026, from a three-year low of US$1,805 an ounce in February 2023 — equivalent to a compounded annual gain of 45.8%. In 2025 alone, gold price gained 64.5%. The rally coincided with a major structural shift where central banks bought over 1,000 tonnes of gold annually for three consecutive years from 2022 to 2024. Purchases dropped slightly to 863 tonnes in 2025, but that is still nearly double the historical annual average of 473 tonnes between 2010 and 2021. Is this the reason? Do you need central banks around the world to buy gold for gold prices to go up?
And if gold is a hedge against risk — geopolitics, war, debt sustainability — why has it been on a downtrend since January? The Iran war started in late February, when the price of gold was around US$5,281 an ounce. It broke US$5,400 in the next two days but has since been on a decline, falling as low as US$4,170 an ounce, before recouping some lost ground following reports of proposals to end the conflict. Gold is currently trading at US$4,570 an ounce. So, this conventional wisdom no longer holds?
