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SOFAZ's Executive Director reveals factors affecting gold prices

Israfil Mammadov, Executive Director of the State Oil Fund of Azerbaijan (SOFAZ)

30 December 2025 15:51 (UTC +04:00)

The State Oil Fund of Azerbaijan (SOFAZ) has generated non-budgetary income totaling USD 11 billion from investments in gold since 2012, said Israfil Mammadov, Executive Director of the State Oil Fund of Azerbaijan (SOFAZ), an interview with APA-Economics.

He said that in recent years, the increase in gold reserves has been a tendency observed globally. This approach is particularly related to intensified external shocks, increased volatility in financial markets, geopolitical risks, and instability in currency markets. 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.

Regarding expectations for the price of gold, the main influencing factors will be the dynamics of real interest rates, the value of the US dollar, conducted monetary policies, as well as the potential future developments of geopolitical tensions, which currently have the strongest impact on gold prices.