Gold has outperformed every major asset class so far this year — up 25.9% YTD and 5.7% in Q2 alone, according to Invesco’s Q2 2025 Gold Report.
While the Fed has yet to cut rates, investors are already repositioning in anticipation of rising core inflation.
At the same time, a weakening dollar, record levels of policy uncertainty, and renewed geopolitical risks have reinforced gold’s role as a strategic hedge.
The report also found that gold has this year delivered returns a long way ahead of the return of both riskier equities and more defensive fixed income assets. Drivers include policy uncertainty and safe-haven demand.
Central bank buying remains robust, with gold now the second-largest reserve asset held by central banks globally after the US dollar.
The US dollar fell 10.7% YTD, increasing gold’s appeal to non-USD investors.
Expectations of at least two rate cuts by the Fed for the second half of 2025 further supports gold momentum.
