Last year was marked by a series of significant events in both the political and economic spheres, and this did not leave global markets unaffected. The gold market, in particular, stood out: prices climbed to historic highs and the market set new records. Toward the end of 2025, the price of gold reached approximately USD 4,400–4,500. Key drivers of this increase included geopolitical tensions, interest rate cuts by the U.S. Federal Reserve, active buying and selling by central banks, and the diversification of reserves.
Despite a slight decline in demand for jewelry and a drop in production, the gold market maintained its resilience. At the beginning of the year, prices continued to rise to new historic highs, surpassing USD 4,600. Global uncertainty and trade disputes boosted demand for safe-haven assets, while accommodative monetary policy made gold more attractive as a means of capital preservation and investment.
Active gold buying and selling by central banks supported the strengthening of the market, while the increasing share of gold in investors’ portfolios highlighted the need for risk diversification amid high volatility across other asset classes. As a result, 2025 was remembered for new historic highs and confirmed gold’s role as a reliable asset in conditions of global economic and political uncertainty.
Historic records and peaks
According to a report by “APA-Economics,” citing the World Gold Council (WGC), the price of gold in global markets set new historic highs 53 times over the past year. In 2025, the highest gold price was recorded on December 23, reaching USD 4,449 per troy ounce. Meanwhile, gold prices closed the year at USD 4,368 per ounce.
This price increase attracted the attention of global investors, who actively invested in fully physically backed gold ETFs (Exchange-Traded Funds). In other words, instead of purchasing gold directly, investors bought fund shares, with each share backed by physical gold stored abroad.
As a result of these investments, funds experienced an unprecedented inflow of capital: USD 89 billion was invested in such funds over the year—the highest figure in history. This activity was driven not only by rising gold prices, but also by the fact that gold posted its strongest price increase since 1979, making it even more attractive for investors.
Highest inflows into ETFs in 2025 (capital inflows and gold price):
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As a result, the total assets under management (AUM) of global gold ETFs—an indicator representing the total value of all assets managed by the funds—doubled over the year, reaching a record high of USD 559 billion. In addition to capital inflows, the volume of physical gold held by these funds also increased, rising from 3,224 tons in 2024 to 4,025 tons.
Reality and forecasts
Against the backdrop of global uncertainty and geopolitical challenges, investors, market participants, and governments continue to seek assets that help preserve value and minimize risks. Gold, thanks to its long-established reputation as a reliable safe-haven asset, remains a key instrument for capital preservation. Instability in financial and investment markets, as well as the high volatility of other asset classes, further enhances its attractiveness for investors.
Forecasts for gold in 2026 are generally positive: various institutions and experts believe that prices will fluctuate in the range of approximately USD 4,600–5,000, reflecting expectations of further price growth amid ongoing geopolitical and economic uncertainty.
Azerbaijan’s strategic decision: more than USD 10 billion in revenue
In an interview with local television channels last week, President Ilham Aliyev spoke about increasing Azerbaijan’s gold reserves, stating that a strategic decision was made in 2025 to expand the country’s gold holdings:
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"We clearly could see the geopolitical developments, and I was absolutely sure that the price of gold would go up, and it skyrocketed. So it earned us a lot of money. By increasing our reserves of gold, our state oil fund earned more than 10 billion U.S. dollars only because of that. But if the price goes down, of course, our reserves will go down. So, now our reserves change every day. Today, probably, they're 84 or 83. Tomorrow, it will be 85. Nevertheless, this is one of the highest per capita reserves in the world, which any country can have, 83, 84 billion U.S. dollars."
For reference, as of January 1, 2025, the gold reserves of the State Oil Fund amounted to 146.6 tons, while by October 1 this figure had increased to 184.8 tons. In other words, SOFAZ increased its gold reserves by 38.2 tons over the past nine months.
According to the Fund’s Executive Director, Israfil Mammadov, increasing gold reserves has become a global trend in recent years. This approach is primarily driven by the intensification of external shocks, rising volatility in financial markets, geopolitical risks, and instability in currency markets.
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“In this context, gold acts as a strategic asset that is not dependent on issuers, relatively free from interest rate and counterparty risks, and allows for the preservation of value during periods of financial stress. Within this framework, by the end of the third quarter of 2025, the volume of gold assets amounted to 185 tons, valued at USD 23 billion, generating non-budgetary revenue of USD 11 billion for the Fund since 2012. While changes in the market price of gold are reflected in the value of the Fund’s overall assets, these changes are not accounted as income for a separate asset class in calculating the profitability of an investment portfolio; rather, they are considered as changes in the value of reserves due to exchange rate fluctuations, in line with the practice of many institutional investors”, - Israfil Mammadov noted.
Conclusion and outlook
In summary, 2025 was not only remembered for records in the gold market, but also reaffirmed the importance of gold in the strategic decisions of investors, institutional funds, and governments. Against the backdrop of global uncertainty, geopolitical challenges, and volatility in financial markets, gold proved itself to be a reliable asset that preserves value.
Azerbaijan also took strategic steps in line with this global trend, increasing the share of gold in the Oil Fund’s portfolio and creating new opportunities for risk management and strengthening financial stability. This approach further highlighted the role of gold as an investment instrument in both national and international contexts.
Overall, gold is not only a tool for investors to reduce risks and preserve capital, but also plays a crucial role in the diversification of strategic portfolios, ensuring financial stability, and acting as a protective shield against geopolitical shocks. From this perspective, the metal’s status as a reliable asset and its prospects will remain strong in 2026 as well; moderate price growth will create additional opportunities for investors and make gold an attractive option for long-term investment.
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