Gold prices break through $4,380, reaching a record high
As of October 21st, London gold spot prices were trading at $4,360.82 per ounce, up 2.90% from the previous trading day, reaching an intraday high of $4,381.11 per ounce. Domestic gold prices also rose, with gold T+D contracts trading at 996.36 yuan per gram, a 2.35% increase on the day.
This surge has brought the cumulative increase in gold prices (金価格)in 2025 to over 60%, making it the strongest year since 1979. Three factors driving gold prices—expectations of a Federal Reserve rate cut, a global central bank gold buying spree, and geopolitical risks—are collectively reshaping the precious metals market landscape.
The gold market experienced a remarkable performance in the third week of October. From October 19th to 21st, gold prices experienced a series of breakthroughs.
On October 19th, the spot gold price stabilized at $4,247, and the next day (October 20th) it experienced explosive growth. In late New York trading, spot gold surged $104.81, a 2.47% daily gain, to close at $4,355.72 per ounce.
Triple forces are driving gold’s record-breaking rally.
Expectations of a Federal Reserve rate cut are the primary driver of gold’s price increase. According to the CME “FedWatch” tool, the market expects a 95.67% probability of a 25 basis point rate cut in October and a 94.64% probability of another rate cut in December.
“The low interest rate environment significantly reduces the opportunity cost of holding non-interest-bearing gold, driving a continued influx of funds into the gold market,” HuaAn Fund analysts noted.
The global central bank gold buying spree has provided solid support for gold prices. Data from the World Gold Council shows that global central banks net bought 890 tons of gold in the first three quarters of 2025, the strongest increase since 1979.
The People’s Bank of China has increased its gold holdings for 11 consecutive months, with gold reserves reaching 74.06 million ounces at the end of September. 95% of the central banks surveyed expect global central banks to continue increasing their gold holdings over the next 12 months.
Geopolitical risks are also boosting gold prices. The 20-day US government shutdown has delayed the release of key economic data, exacerbating economic uncertainty. Continued uncertainty in US-China trade negotiations, coupled with escalating conflict in the Middle East, has driven safe-haven flows into the gold market.
Global central banks are increasing their gold holdings at a record level, reflecting structural doubts about traditional reserve assets. International Monetary Fund (IMF) data shows that by the end of the second quarter of 2025, the US dollar’s share of global foreign exchange reserves had fallen to 56.32%, the lowest level since 1995.
A report from the Official Monetary and Financial Institutions Forum (OMFIF) shows that among the world’s 75 central banks, managing $5 trillion in assets, one-third plan to increase their gold reserves in the next one to two years, a five-year high.