With global demand approaching 5,000 tonnes and prices exceeding US$4,000 per ounce, 2025 is not simply another year of record highs; it marks the consolidation of a new regime for the metal.
Column written by Matías Marañón.
Gold is no longer functioning solely as a barometer of uncertainty, but is increasingly becoming a structural asset within global portfolios. The decoupling between real yields on U.S.
Treasury bonds and the price of gold is clear evidence of this transition. The primary driver of this shift is the accumulation of gold by Asian central banks, particularly China. Since the pandemic, their purchases have increased at more than twice the pace observed in previous years and with limited price sensitivity, creating a virtually inelastic floor for demand. Institutional investors appear to be gradually internalizing this dynamic. While monetary authorities hold around 20% of their reserves in gold, institutional portfolios allocate barely about 2%. In this context, gold-backed ETFs are showing a resurgence and are on track for one of their strongest historical performances.
The backdrop to this transformation is fundamentally geopolitical. The subprime crisis, the acceleration of global fragmentation following the pandemic, and the widespread use of financial sanctions over the past two decades have eroded confidence in the Western financial architecture and accelerated processes of de-dollarization. Ongoing discussions within the European Union regarding the potential confiscation of Russian assets could further reinforce this trend. For a growing number of countries, the question is no longer whether to reduce exposure to the U.S. dollar, but how quickly. In this environment, gold is being repositioned as a monetary tool within alternative financial systems.
On the supply side, the sector faces a paradox: record prices coupled with limited capacity for expansion. Mine production is growing by just 1% per year, below historical averages. Ore grades continue to decline, while total marginal costs are rising to around US$3,200 per ounce.
As a result, capital discipline prevails, and the current project pipeline is largely limited to replacing depleted capacity rather than expanding it. This dynamic is pushing the industry toward greater concentration and efficiency, and will continue to drive consolidation through mergers between majors and mid-tiers in the face of scarce organic growth opportunities.
These constraints are compounded by geopolitical and regulatory bottlenecks. Africa combines vast geological potential with increasing political instability. In Latin America, social governance challenges and permitting processes are slowing down flagship projects, as illustrated by recent cases such as Quebradona in Colombia, Loma Larga in Ecuador, and La Coipa in Chile. Several global mining companies are reassessing their exposure to these jurisdictions and considering portfolio rebalancing.
In conclusion, gold is moving beyond its role as a tactical safe haven to consolidate itself as a pillar of the emerging multipolar financial order. Supported by structural supply constraints, it is advancing toward a supercycle that is less visible than that of copper, but with significantly deeper geopolitical implications. Its role will become increasingly central in the financial architecture that is now taking shape.
Source: Sonami