Gold has entered a historic chapter in 2025, reaching record highs and attracting renewed interest from institutional and retail investors alike. For UK investors seeking security amidst economic uncertainty and geopolitical flux, gold offers both a hedge and a high-performing asset.
But is now the time to sell? Our finance expert Dan explains things for us.
Gold Hits Record Highs in 2025
As of May 2025, gold prices have surged past $3,500/oz, up 29% year-to-date and following a 27% increase in 2024. The World Gold Council reports an average Q1 2025 price of $2,860/oz, marking a 38% year-on-year increase. These prices are in USD for global benchmarking, but remember that USD to GBP currency rates will impact what your gold is worth if you sell in the UK.
What’s Driving the Gold Rally?
Well in simple terms Trump’s tariffs have destabilised the markets, which always sees a rise in Gold prices. But in detail it’s because:
1. Central Bank Buying
Emerging economies, particularly China, have ramped up gold reserves to stabilise currencies and diversify away from the US dollar. This has triggered a global race for physical gold, tightening supply.
2. Investor Demand
UK investors are increasingly drawn to gold ETFs and bullion due to:
- Inflation concerns
- Weak GBP vs USD
- Volatility in tech stocks and crypto
Gold-backed ETFs globally grew by £8.8 billion in April alone.
ETFs have revolutionised access to gold, allowing UK ISA and SIPP holders to gain exposure without holding physical metal. Popular options include SPDR Gold Shares (GLD) and iShares Physical Gold ETC.
As of Q1 2025, ETFs like GLD and GLDM held 31+ million ounces, valued at over $90 billion.
3. Safe-Haven Sentiment
Rising geopolitical risk, especially tensions in Eastern Europe and Asia, continues to drive demand for gold as a globally recognised store of value.
Gold Supply Constraints & Mining Impact
While demand drives much of gold’s price volatility, supply also plays a key role. Annual mine production adds only 2–3% to above-ground supply. Environmental regulation, rising extraction costs, and fewer new discoveries have made production growth more difficult.
Major producers like China, Australia, South Africa, and Russia are each facing geopolitical or regulatory headwinds in 2025.
Why Do Gold Prices Rise During Market Crashes?
Gold cannot be printed or created like fiat currency, making it a finite, tangible hedge against inflation or currency devaluation. Its indestructibility and liquidity across global markets offer unique resilience during financial crises.
During market downturns:
- Flight to Safety – Investors retreat from risk assets and turn to gold.
- Currency Devaluation – Central banks lower rates or inject liquidity, weakening fiat currencies.
- Negative Real Yields – When inflation outpaces interest rates, gold becomes more attractive.
- Supply & Sentiment – Limited supply + global demand = upward pressure.
Case Study: In the 2008 crisis, gold rose 25% while the FTSE 100 fell over 30%.
Gold’s appeal isn’t just economic, it’s psychological. The metal serves as a “trust anchor” in times of instability, with a 5,000-year history to support it.
Jewellery & Tech Demand (Quick Insight)
While investors drive much of the price momentum, ~50% of annual gold demand comes from jewellery, particularly in India and China. Additionally, electronics and medical tech industries create stable, growing demand due to gold’s conductivity and corrosion resistance.
Gold vs. Crypto vs. Real Estate: Which Hedge is Right in 2025?
Your savings and investments matter, it’s literally your children’s future in your hands. Where you invest carries various levels of risk, and obviously the safest is high interest savings accounts. Here’s a breakdown of gold versus other common options.
| Asset | Pros | Cons |
|---|---|---|
| Gold | Highly liquid, inflation hedge, global demand, stable | No yield, storage/insurance costs |
| Crypto | 24/7 access, high upside potential, decentralised | Volatile, unregulated, tech-correlated |
| Property | Tangible, income-producing, long-term value | Illiquid, high entry costs, region-dependent taxes |
A balanced UK portfolio in 2025 may include a mix: gold for stability, crypto for growth, and real estate for long-term yield.
Price Dips & Volatility Still a Factor
Despite strong momentum, volatility persists. On 12 May, gold dropped over 3% following improved US-China trade sentiment, briefly hitting $2,228/oz.
Analysts expect consolidation around $3,200–$3,500, with upside potential to $4,000+ if macro conditions deteriorate.
Outlook & Price Forecasts
| Analyst | Year-End Forecast | Notes |
|---|---|---|
| Goldman Sachs | $3,700/oz | Bullish scenario |
| JP Morgan | $3,400/oz | Medium risk outlook |
| UBS | $4,500/oz | Extreme recession case |
What UK Investors Need to Know
Selling Gold in the UK: Tax Implications
- CGT-exempt: Investment-grade coins (e.g. Britannia, Sovereign)
- Taxable: Bullion bars and jewellery may be subject to Capital Gains Tax if above the annual threshold.
- Always keep purchase/sale receipts for valuation and HMRC records.
Trusted Places to Sell Gold
Choose FCA-registered or highly rated buyers to sell Gold (check Trustpilot or Google reviews)
Storage & Insurance
- Use bonded warehouses or insured home safes.
- Use Royal Mail Special Delivery when posting high-value items.
Summary: Strategic Tips for 2025
While gold still favours a long-term upside (CGT-free coins and bullion are best), you obviously need to sell during local highs for best returns. Always track BoE rate decisions, GBP/USD fluctuations, and inflation when deciding.
