Gold Boom Alert: Experts Warn Investors About Possible Losses?

Gold is glittering again. With prices soaring above $3,500 (£2,630) per ounce, the precious metal has reached its highest inflation-adjusted value ever, prompting massive demand from investors, jewellers, and even central banks.

At Hatton Garden Metals, a leading gold dealership in London, old jewellery worth hundreds of thousands is traded daily, while buyers line up for coins and bullion bars. “There’s excitement but also nervousness,” says managing director Zoe Lyons, noting how speculation and uncertainty are pushing trades to new heights.

The spike is driven largely by global economic instability. Analysts point to US President Donald Trump’s erratic trade policies, including his public attack on Federal Reserve chairman Jerome Powell, as a major trigger. The fallout has weakened the dollar and spurred a rush into safer assets like gold.

Other factors include:

• Inflation fears and recession risks, amplified by global crises.
• Record-breaking central bank purchases, particularly by nations wary of US financial dominance like China, Russia, and Turkey.
• A growing sentiment of FOMO (fear of missing out) among everyday investors.

Goldman Sachs predicts the metal could hit $4,500 (£3,400) by late 2025, depending on recession threats or further trade escalations.

Yet, caution looms. Experts warn of a potential market bubble, referencing historic crashes in 1980 and 2011, both following rapid price climbs. A sudden correction could leave latecomers at risk.

For now, gold remains the safe haven of choice—but history suggests even this treasure isn’t immune to volatility.