Why gold is having its best year since 1979
Original story by: NPR
Last updated: Oct 8, 2025
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- Context: Gold prices have reached a record high of $4,000 per ounce, reflecting investor anxiety about the U.S. economy. This surge is attributed to the precious metal's traditional role as a "safe haven" during times of economic uncertainty and President Trump's perceived erratic economic policies.
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- Detailed Summary:
- The price of gold has surpassed $4,000 per ounce for the first time, marking a significant rally with over 50% increase this year.
- Gold is considered a "safe haven" asset, attracting investors amidst concerns over the U.S. economy, particularly influenced by President Trump's policies on trade and the Federal Reserve.
- Despite U.S. stock market indices reaching record highs, the U.S. dollar has depreciated by approximately 10%, posing risks to the global economy and the U.S.'s economic superpower status.
- This dollar weakness is directly linked to increased investor uncertainty regarding policy decisions, leading to a shift towards gold.
- The current gold rally is the strongest in nearly fifty years, since the energy and inflation crises of 1979.
- Analysts at Goldman Sachs predict gold prices could reach $4,900 by the end of 2026, with potential for even higher gains.
- While gold offers perceived safety, it does not generate income through dividends or interest; profit relies solely on price appreciation.
- Physical gold ownership presents logistical challenges, including storage, security, and insurance.
- Gold-backed funds offer an alternative for investors who want exposure without physical possession.
- The current trend in gold also underscores the importance of investment diversification beyond a single asset class, such as stocks.
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