Gold has been on an unprecedented tear in recent months, with its price reaching new all-time highs. Spot gold reached $3,674 per ounce earlier this week, up from previous high of $3,636 per ounce, marking a significant gain of nearly 40% for the year.
This surge is due to several factors, including expectations for changes in monetary policy, a weakening U.S. dollar, continued inflation, and increased demand for assets considered safe.
The upward trend in gold prices has boosted the performance of prominent ETFS – VanEck Gold Miners ETF (GDX), SPDR Gold Trust (GLD), and the Albilad Gold ETF.
The Engines Powering Gold’s Historic Rally
Gold’s surge this year is underpinned by a potent mix of numeric realities and macroeconomic shifts. As of September 15, 2025, spot gold is trading around $3,644.98 per ounce, slightly off the record high of $3,673.95 hit earlier in the week, representing a year-to-date gain of approximately 42.6%.
Behind the rally is persistent central bank demand.
In 2025 alone, central banks added more than 166 tonnes of gold in Q2, building on a Q1 total of 244 tonnes, although that modestly trails last year’s record purchases. Notably, Poland leads global net purchases year-to-date with 67 tonnes, while the People’s Bank of China added 36 tonnes, marking nine consecutive months of buying activity.
At the same time, interest rate expectations have tilted decidedly dovish. Sluggish U.S. job data has pushed markets to price in a nearly certain 25-basis-point Fed rate cut at the September 2025 FOMC meeting, with further easing widely anticipated by year-end. In such a low-rate environment, gold’s zero-yield characteristic becomes more attractive relative to bonds and interest-bearing assets.
Meanwhile, the U.S. dollar has weakened, with the DXY index slipping to approximately 97.6, touching a seven-week low. That decline makes gold less expensive for holders of other currencies and further boosts demand.
Together, a gold price above $3,640, central bank purchases exceeding 400 tonnes in the past six months, mounting expectations for Fed rate cuts, and a weaker U.S. dollar have combined to propel gold’s historic rally.
Global Impact Signals a Return to the Golden Age of Inflows
During the first half of 2025, gold prices surged 26%, and ETF demand responded strongly. Global gold investment demand rose 78% year-on-year in Q2, marking the best semi-annual performance since the first half of 2020.
Despite some profit-taking as prices eased from a Q2 average high of $3,280/oz, ETF demand remained resilient, a sharp reversal from the outflows that dominated most of 2024.
According to the World Gold Council, global gold ETF holdings climbed to 3,639 tonnes by July 2025, while assets under management rose 1% to $386 billion, the highest level since August 2022. Two of the most prominent vehicles illustrate the trend: the SPDR Gold Trust (GLD), which tracks physical bullion, is up 38% year-to-date, while the VanEck Gold Miners ETF (GDX) with nearly $19 billion in AUM has delivered a staggering 105% year-to-date return, fueled by booming profitability in mining equities.
The GCC’s Role in the Gold ETF Landscape
Although global statistics are more transparent, developments in the GCC continue to reflect broader gold market dynamics. With a deep-rooted cultural association with gold as both a store of value and a preferred investment, the region remains a significant contributor to worldwide demand.
Rising gold prices are enhancing the attractiveness of gold ETFs, offering investors in the GCC a liquid, exchange-traded, and secure alternative to holding physical gold. Their accessibility and lower custody costs make them an increasingly popular option among contemporary investors.
Among the region, Saudi Arabia stands out, with demand for gold bars and coins climbing 15% year over year in Q1 2025, according to WGC data. This underscores strong investor interest even at higher price levels.
Gold is continuing to attract investor interest, with the Albilad Gold ETF (9405) in Saudi Arabia benefiting from this global trend. Founded in 2020, Albilad Gold ETF is the first Shariah-compliant gold ETF in the region. This open-ended fund is designed to simulate global gold prices, providing a way for investors to access the physical gold market and offering the flexibility of buying and selling through the Saudi Stock Exchange (Tadawul).
Albilad Gold ETF reached its highest trading price since its launch around February 2025. YTD, the ETF delivered a return of around 38%
Gold Price Projections
On September 12, UBS lifted its gold price outlook by $300 from its prior forecast, now expecting it to reach $3,800 per ounce by late 2025, and to climb further to $3,900 by mid-2026. The bank attributed the upgrade to expectations of Federal Reserve rate cuts, a weaker U.S. dollar, and ongoing geopolitical uncertainties.
UBS also adjusted its forecast for gold ETF holdings, projecting they will surpass 3,900 metric tons by the end of 2025, nearing the all-time peak of 3,915 tons recorded in October 2020.
Key Takeaways
The recent gold price rally has been a major tailwind for gold ETFs globally, leading to record-high AUM and significant inflows. The GCC region, with its deep-seated appreciation for gold, is a crucial component of this trend, as investors seek to protect and grow their wealth in an uncertain economic and political landscape.
While the recent rally has been a boon for investors, experts caution that the market remains sensitive to changes in economic data, particularly U.S. inflation and Federal Reserve policy decisions. However, with continued geopolitical tensions and strong central bank demand, the outlook for gold remains bullish in the near to medium term.
*Data sourced from Australian Broadcasting Corporation, IG.com, Argaam, Bloomberg, Reuters, LiveWire
