One of the most significant forces supporting bullion is sustained central-bank buying. The share of gold in global central bank reserves has risen sharply, from 13 per cent in 2022 to roughly 22 per cent by Q2 2025, despite prices more than doubling over the same period. | Photo Credit: istock.com
According to HSBC Bank, gold is heading for its strongest annual performance in nearly five decades. The metal has posted a year-to-date surge of approximately 54 per cent, marking “one of its most successful years” driven by heightened global uncertainty and concerns around US dollar debasement.
In October, prices touched an all-time high of $4,380/oz, before retreating as retail investors took profits. Even after the correction to around $3,885/oz, gold has managed to stabilise around the $4,000 level, with HSBC noting that the metal “appears to have resumed its upward trend.”
One of the most significant forces supporting bullion is sustained central-bank buying. The share of gold in global central bank reserves has risen sharply, from 13 per cent in 2022 to roughly 22 per cent by Q2 2025, despite prices more than doubling over the same period.
HSBC highlighted that elevated prices have done little to deter institutional buyers. Central banks are purchasing gold for diversification and as protection against “geopolitical conflicts, economic and fiscal challenges, rising inflation, and significant political shifts.” Their continued buying is expected to “establish a price floor, keeping gold at elevated levels.”
Retail demand, especially via gold exchange-traded funds (ETFs), has surged since mid-2024. The report notes that the same factors driving central-bank accumulation, economic uncertainty, inflation risks, and weakening confidence in the US dollar have “significantly boosted interest in investing in gold.” ETF holdings have shown a persistent rising trend, adding further momentum.
While gold has recently shown an unusual positive correlation with equity markets, HSBC clarified that this is mainly due to investor behaviour at elevated gold prices, rather than a change in gold’s safe-haven nature. The bank reiterates that “gold is still a protective asset.”
Gold’s appeal is further supported by expectations of additional US Federal Reserve rate cuts following delays in economic data during the US government shutdown. HSBC believes this creates room for further upside in the metal “albeit at a slower pace than previously experienced.”
The report outlined two key downside risks: a sudden hawkish turn by the Federal Reserve and a sharper-than-expected improvement in global economic conditions. Yet, with persistent uncertainty and a fragile US dollar outlook, gold’s upward bias remains intact.
Published on November 24, 2025
