Cracking the Gold Code: Price Drivers and Your Path to Ownership
Gold prices are hovering near record highs — but the story isn’t over. Here’s why the world’s oldest asset still has a place in a modern portfolio.
Prices have recently surged past the USD4,000 mark1. These levels would have seemed far-fetched just a few years ago. The metal’s remarkable rally, fuelled by persistent inflation, geopolitical unease, and a weaker US dollar, has left many investors wondering where is the gold price heading in long term.
This situation isn’t new, but this time around, the backdrop is. Unlike previous surges driven mainly by short-term fear, today’s demand for gold feels structural. It feels more real. Central banks are stockpiling it, retail investors are rediscovering it, and even digital-first investors are buying slivers of it through apps. This partially explains the recently interest on gold investing.
A deep-rooted rally
In the past year, gold has climbed nearly 57%, brushing against record highs multiple times. Here are the factors behind that drive:
- Central bank accumulation
China’s central bank recently extended its gold-buying streak to the 11th consecutive month2, while India, Singapore, and Turkey remain active buyers. This isn’t a speculative trade; it’s a geopolitical signal. As countries diversify away from the US dollar, gold serves as a neutral reserve asset — one that doesn’t depend on anyone’s balance sheet. - Expectations of rate cuts
Investor has priced in that US Federal Reserve will continue cutting rates into 20263. Lower yields reduce the “opportunity cost” of holding non-interest-bearing assets like gold. When cash earns less, gold suddenly feels more valuable. - Persistent inflation and a weaker dollar
Inflation has moderated from its post-pandemic peaks, but it’s still sticky. Currencies, from the ringgit to the yen, have weakened against the greenback. For many, gold remains the oldest and most elegant hedge against purchasing-power erosion.
Simply put, the drivers are both monetary and psychological. When people lose faith in paper assets or politics, they want something tangible and timeless where gold has been perceived as safe haven asset.
Gold: The missing piece in your investment puzzle?
You’re wondering if you missed the train. Prices are near historic highs, so shouldn’t you wait for a dip? Maybe. But then again, timing the market is difficult, gold could serve as part of the diversification options in your portfolio depending on your risk profile.
Few things that is different this time:
- Broader ownership base
Central-bank purchases have tightened supply, while retail participation has been expanded through exchange-traded funds (ETFs) and digital-gold platforms. Unlike the 2011 rally, demand today is more global and less speculative. - Slow-burning inflation
Inflation is proving stubborn, not explosive. That makes gold’s steady, defensive quality appealing to investors who value stability over quick gains. - A long runway of structural shifts
Energy transitions, geopolitical realignments, and digital-asset volatility are all fuelling uncertainty. In that climate, owning a slice of something real and scarce remains compelling.
Rethinking gold’s role
Instead of asking “Is it too late?” A better question might be “What role does gold plays in diversifying my porfolio?”
Gold isn’t a get-rich-quick asset; it’s a stay-rich-slowly one. Its performance isn’t tied to corporate earnings or dividends, and its correlation with stocks and bonds is low. This makes it a natural diversifier, especially when markets wobble.
Financial advisers often recommend allocating up to 5% of a diversified portfolio to gold or other precious metals. The logic isn’t to chase returns but to reduce volatility. In years when equities tumble or currencies weaken, gold tends to hold its ground.
For seasoned investors, that up to 5% slice can also function as a hedge against systemic risks such as policy shocks, currency debasement, or geopolitical events that upend valuations. For new investors, gold offers a useful entry point into tangible assets, teaching patience and long-term perspective.
Cliff Young approach to investing: Why gold’s “shuffle” works |
In 1983, 61-year-old Australian farmer Cliff Young won an 875km ultra marathon by shuffling at a slow and steady pace. While other racers alternated between sprinting and sleeping, Young shuffled relentlessly, eventually outpacing the pack. He won the race, beating the second-placed runner by an astounding 10 hours. |
Before you buy… read this
Of course, we should look before we leap. There are reasons to be cautious.
- A stronger-than-expected global recovery could push real yields higher, making bonds relatively more attractive.
- A rebound in the US dollar might dampen demand for gold-denominated assets.
- A sharp correction after such a long rally isn’t impossible as short-term traders take profits, creating temporary dips.
Still, these risks don’t erase gold’s strategic appeal. They merely underline that gold should be a measured allocation, not an all-in bet.
How to own gold in 2025
Investing in gold is more convenient — and varied — than ever. Lining up outside the jeweller’s is now just one of many options, some only requiring a few clicks on an app.
- Physical gold
Bars, coins, or jewellery appeal to traditionalists. They offer satisfaction but require secure storage and incur premiums. - Exchange-traded funds (ETFs)
ETFs like the iShares Gold ETF (CH), held via the RHB Gold Fund, track spot prices closely and provide liquidity without the hassle of storage. - Gold-linked funds
The RHB Gold & General Fund invests in global mining and metals companies, offering equity-linked upside that may outperform in prolonged bull markets. - Structured or dual-currency products
For investors seeking enhanced yield, Dual Currency Investments (DCI Gold) link returns to both gold and foreign-exchange movements — suitable for those with higher risk tolerance. - Paper gold
RHB allows paper gold/silver investment in a Multi Currency Account, with flexible initial purchases, no physical storage, and no minimum/maximum limits. Check out our RHB CASA Gold Campaign here.
For experienced investors, combining several of these can turn gold exposure into a multi-layered strategy that includes physical holdings for legacy, ETFs for liquidity, and structured notes for tactical plays. For newer investors, starting small through a regulated fund or digital-gold app offers both safety and flexibility. Your Relationship Manager will be able to help you establish an approach that works for your goals and risk appetite.
Purpose, not price
At its core, gold remains a paradox: it doesn’t yield interest, it doesn’t generate profits, yet it endures. That’s because gold isn’t a bet on growth; it’s insurance against uncertainty. Whether you’re a seasoned investor fine-tuning your portfolio, or a newcomer seeking an anchor in turbulent times, gold’s relevance lies not in its latest price tag but in its timeless function.
Whether gold suits you depends on your objectives, risk tolerance, and time horizon. Discuss an appropriate approach and sizing with your RHB Relationship Manager.
1 BBC News, Gold surges past $4,000 an ounce as uncertainty fuels rally, 8 October 2025.
2 Reuters, China's central bank extends gold buying for 11th month, 7 October 2025.
3 Reuters, JP Morgan raises gold outlook on investor interest, central bank buying, 23 October 2025.
Disclaimer:
*Member of PIDM. RHB Multi Currency Account is protected by PIDM Up to RM250,000 for each depositor. Multi Currency Account Gold Investment and Multi Currency Account Silver Investment are not protected by PIDM.
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