Gold prices rocketed more than 50% during 2025. This sudden spike has alarmed experts and market participants alike that it could lead to an undesirable BOE-induced economic turmoil. The dollar figure has more than tripled. Since mid-August, it has skyrocketed by almost 20%, easily doubling the red-hot performance of the U.S. stock market. This is indicative of the larger trend that has investors flocking to gold as the uncertainties around the economy continue to deepen.
Ray Dalio, the billionaire founder of Bridgewater Associates, isn’t kidding around when he tells investors this. He challenges them to view gold as an insurance policy against future unanticipated market disorder. Dalio’s warning comes at a time when he foresees the possibility of a “civil war of sorts” occurring within the United States, reflecting deepening political and social divisions.
The high volatility of gold prices continues to be a key issue and deterrent for potential investors. Later, we’ll discuss why historically, investing at high market peaks can be dangerous for your wallet. Financial conditions, defined by negative or lower interest rates, have produced a boon for investments in gold that many of us have never seen before.
As Aakash Doshi, head of gold strategy at State Street Investment Management, noted, there lies the rub. He explained that as interest rates decline, investing in interest-bearing investments becomes less attractive. That sentiment is in line with the larger backdrop of increasing skepticism of traditional safe havens, such as treasury securities. According to many experts, investors have recently begun looking toward gold.
Recent rising gold prices have played into this dynamic. This real increase comes on the heels of a significant nominal U.S. dollar depreciation, which has fallen nearly 11% in value relative to other currencies during the first half of 2025. This change represents a major turn toward decreased reliance on the dollar, which has traditionally been the dominant global reserve currency. This will make gold that much more attractive as a safe haven asset.
Analysts say there are a number of factors fueling the rise in gold prices. They underscore pressures in long-duration bond markets and the broader depreciation of other assets that are often viewed as safe havens or low-risk investments. The long war between Russia and Ukraine adds another layer of unpredictability to an otherwise shaky economic outlook. Even more than these other counterforces, sharp partisan divisions in U.S. politics have made the situation worse.
It only gets worse as we update past hiring projections. Now we know that’s because the U.S. economy was adding a lot fewer jobs in 2024 and early 2025 than we were led to believe. Paolo Pasquariello, an economist, highlighted the implications of these developments, emphasizing that “there’s no way you can interpret these exploding gold prices as a good sign — they’re a warning sign.”
Pasquariello further noted, “Investors are getting nervous about all the traditionally safe U.S. assets like treasury securities. Where else will they put money? Gold.” This is part of a larger trend among investors, who are understandably becoming more skittish about a volatile market.
Wonder Market Analyst Jim Wyckoff had a bearish eye on the gold and silver markets today. He surmised, “Gold and silver are in a cyclical boom right now, but you can bet they’ll go into a bust period at least as soon as investors think they’re going to.” His remarks underscore the dangers the market poses by speculating in commodities during times of high volatility.
