Gold (XAU/USD) started the year on a bullish note and registered impressive gains in the first quarter. Following a consolidation phase during the summer months, the precious metal surged higher in the third quarter and reached an all-time record high of $4,381 in October. Although XAU/USD corrected lower, buyers refused to hand over the reins heading into the holiday season.

Throughout 2025, Gold set over 50 record peaks and rose more than 60%, becoming one of the best-performing commodities of the year. A combination of fundamental factors fuelled the precious metal's relentless advance, allowing investors to ignore technically overbought conditions. Assessing Gold's annual gains, "this performance has been supported by a combination of heightened geopolitical and economic uncertainty, a weaker US Dollar, and positive price momentum. Both investors and central banks have increased their allocations to Gold, seeking diversification and stability," said the World Gold Council.

2026 is poised to be an interesting year for Gold. Changes in global economic dynamics, the ever-shifting geopolitical landscape, institutional activity and major central banks' monetary poGold in 2025: A year to remember
After posting losses for two consecutive months to wrap up 2024, Gold reversed its direction in early 2025. Escalating geopolitical tensions and heightened uncertainty about the global economic outlook, due to the new United States (US) administration's aggressive trade policy, revived safe-haven demand. In turn, XAU/USD gained nearly 20% in the first quarter, outperforming all US major stock indices.

Leading up to the January 20 inauguration of newly elected US President Donald Trump, which had the potential to trigger a deep trade conflict with the US's partners, markets adopted a cautious stance. With Trump signing an executive order on February 1, imposing 25% tariffs on goods from Mexico and Canada and an additional 10% on Chinese imports, the trade war officially began. After the 10% tariff on China took effect on February 4, Beijing retaliated by raising tariffs on US goods. In the meantime, the world's second-largest economy's Gold reserves continued to rise in February, further supporting the uptrend in prices.

Gold's rally gained momentum in March as the trade war continued to heat up, with the Trump administration expanding and raising tariffs. At the same time, softer-than-expected inflation data from the US and the Federal Reserve's (Fed) acknowledgement of the US economy showing signs of a slowdown, despite keeping the monetary policy rate unchanged, helped XAU/USD to stretch higher.

The introduction of the Trump administration's reciprocal tariff framework in early April marked the beginning of the second quarter. A broad-based US Dollar (USD) weakness, in anticipation of the aggressive trade regime weighing on economic growth, combined with a risk-averse market atmosphere, allowed Gold to settle above $3,000 and register gains for the fourth consecutive month.

Source: Fxstreet