Gold’s Rally: A Signal of Global Realignment
Thursday, September 25th 2025
Gold’s remarkable climb toward $4,000 an ounce is sparking both excitement and unease. While precious metals investors celebrate historic returns, analysts warn that this surge reflects deep cracks in the global economic and geopolitical landscape. Stephen Innes, managing partner at SPI Asset Management, describes the current momentum as “historic and unnerving,” with implications that go far beyond simple market gains.
Gold’s Unprecedented Momentum
On Tuesday, prices rose another 1%, narrowing the gap to the symbolic $4,000 level. Year-to-date, gold is already up by an astonishing 45%, surpassing the inflation-adjusted highs of 1980 and shattering key resistance levels.
“This isn’t just gold climbing—it’s blazing into uncharted territory,” Innes observed, noting that the surge has exceeded expectations and defied traditional market signals.
Beyond Inflation: A Cocktail of Forces
While inflation is often linked to gold’s strength, Innes argues this rally stems from much broader drivers. Normally, a true inflation panic would show in soaring bond yields and a steepening yield curve—but that’s not happening.
Instead, gold is benefiting from:
- Central bank stockpiling
- Capital flight from fiat currencies
- Geopolitical hedging amid rising mistrust
This combination, Innes says, is far more potent than any single inflationary pressure.
Lessons from History: 1979 vs. 2011 vs. 2025
Innes draws parallels with past gold booms:
- 1979: Investors fled from runaway inflation, doubling gold prices in a year.
- 2011: Retail investors drove prices higher amid fear of quantitative easing and money printing.
- 2025: The current rally, however, feels more strategic—anchored in sovereign choices rather than panic.
He stresses that this is not a speculative mania but rather a deliberate repositioning of global reserves.
Central Banks Lead the Charge
At the core of this movement are central banks, actively diversifying away from the U.S. dollar. Beijing’s recent decision to open Shanghai as a hub for official reserves, while symbolic, signals a wider recalibration of the financial order.
“Any shift in global reserve architecture,” Innes notes, “comes with an implicit bid for gold.”
The Equity Market Connection
Skeptics often point to Wall Street’s strength as evidence that gold’s rally may be overblown. Yet Innes argues that U.S. equities themselves are not rising purely on fundamentals, but on “the steady drip of monetary debasement.”
Last week’s Federal Reserve rate cut highlighted the fragile balance policymakers face. Even as Chair Jerome Powell downplayed aggressive easing, investors sensed an expansion in money supply—and with it, doubts about fiat credibility.
This makes gold not just a momentum play, but a structural hedge embraced by sovereign wealth funds and long-term investors alike.
A Recalibration of the Global Order
According to Innes, today’s rally should be seen as part of a larger shift.
- 1979: Fear-driven firestorm.
- 2011: Retail panic over QE.
- 2025: Strategic recalibration of the global system.
“The lesson from history is clear,” Innes concludes. “Ignore gold’s message at your peril.”
Current Price Action
After testing $3,800 per ounce on Tuesday morning and briefly reaching $3,779.34 overnight, gold has since cooled. By the North American session, spot gold was trading at $3,729.82 per ounce, down 0.91% on the day.
