Gold prices rose during Tuesday’s trading and reached a new record high. After surpassing the $3,600 per ounce barrier yesterday, US futures for the precious metal achieved another historic milestone today by breaking above the $3,700 per ounce level.

On the back of these gains, the yellow metal has extended a rally that has lifted its value by more than 90% since late 2022. Demand is expected to remain strong in the coming period, driven by a combination of factors outlined in the following report.

Will Central Banks Continue Buying?

Net annual central bank purchases have exceeded 1,000 metric tons per year since 2022, according to consultancy Metals Focus, which expects 900 tons of purchases this year — double the annual average of 457 tons during 2016–2021.

Emerging economies are seeking to diversify reserves away from the dollar, after Western sanctions froze about half of Russia’s official foreign exchange reserves in 2022.

Official figures reported to the International Monetary Fund account for only 34% of estimated central bank demand in 2024, according to the World Gold Council (WGC).

These purchases represented 23% of total annual gold demand between 2022–2025, double the share recorded in the 2010s.

Will Jewelry Demand Keep Falling?

Gold demand for jewelry — the primary source of physical demand — fell 14% to 341 tons in the second quarter of 2025, the lowest since the pandemic-hit third quarter of 2020, according to the WGC.

High prices were the main driver, particularly in China and India, where their combined share of the global market dropped below 50% for only the third time in five years.

Metals Focus estimated that gold jewelry fabrication fell 9% to 2,011 tons in 2024 and is expected to record a further 16% decline this year.

Are People Still Buying Bars and Coins?

A major shift has occurred in investor appetite for different retail products, but overall demand has remained strong.

Demand for gold bars rose 10% in 2024, while purchases of gold coins fell 31%, according to the WGC.

This trend has continued in 2025, with Metals Focus forecasting physical net investment to rise 2% this year to 1,218 tons, supported by higher demand in Asia amid positive price expectations.

Can Gold ETFs Attract More Inflows?

Exchange-traded funds (ETFs) have become a more important source of demand this year, recording inflows of 397 tons between January and June — the largest first-half inflows since 2020, according to the WGC.

Total ETF holdings reached 3,615.9 tons by the end of June, the highest since August 2022. The all-time high was 3,915 tons five years ago.

Metals Focus expects net investment in gold-backed ETFs to reach about 500 tons in 2025, after recording outflows of 7 tons in 2024.

Palladium prices fell during Tuesday’s trading amid a stronger US dollar against most major currencies, in addition to prospects that both the United States and the European Union may toughen sanctions against Russia, one of the world’s largest producers and exporters of industrial metals.

US-based Sibanye-Stillwater has been considering imposing tariffs on Russian palladium imports, a move that could add volatility to the metal’s prices.

The Johannesburg-headquartered company explained that the petition it submitted adds further uncertainty to the outlook for platinum group metals (PGMs), after a price rally since the beginning of the year driven by reduced production in South Africa during the first half and weak liquidity in the spot market.

Neal Froneman, the company’s CEO, said in a July 31 statement on its website: “We believe that Russian palladium imports are being sold below market prices due to several factors, beginning primarily after Russia’s invasion of Ukraine in 2022.”

He added: “Securing protection from subsidized and dumped Russian imports will enable Sibanye-Stillwater, its employees, and the entire US PGM industry to compete in a fairer environment.”

A ruling on the petition is expected within 13 months.

Russia’s Nornickel, the world’s largest palladium producer with a 40% share of global mined output, declined to comment.

Sibanye-Stillwater, which has production assets in South Africa and the US, posted a consecutive annual loss last year after writing down $500 million on its US palladium assets amid falling prices.

Spot palladium prices have risen 31% since the beginning of 2025, with positive expectations for the rest of the year. Analysts polled by Reuters in July predicted palladium would rise in 2025 for the first time in four years, supported by platinum gains.

But analysts at Heraeus warned that “tariffs on Russian metal will not necessarily affect market balance, but could redirect global flows of the metal, increasing price volatility.”

According to Trade Data Monitor, Russia and South Africa are the main suppliers of palladium to the US. China ranks second after the US as the largest buyer of the metal from Russia.

Russian palladium imports to the US rose 42% year-on-year to exceed 500,000 troy ounces in the January–May period, according to Heraeus.

Palladium and platinum group metals are widely used in purifying exhaust emissions from gasoline-powered cars. They have so far avoided both US sanctions on Russian companies over the war in Ukraine and any import tariffs announced by President Donald Trump.

Separately, according to the CME FedWatch tool, markets currently see more than an 86% probability of a 25-basis-point Fed rate cut at the September meeting.

Meanwhile, the dollar index rose by 0.2% to 97.6 points as of 15:56 GMT, recording a high of 97.6 and a low of 97.2.

In trading, December palladium futures fell by 0.1% to $1,155 an ounce as of 15:56 GMT.

Bitcoin rose during Tuesday’s trading, recovering a small part of its recent losses, supported by growing bets that the US Federal Reserve is on the verge of cutting interest rates. However, mounting doubts over the effectiveness of institutional treasury holdings of the cryptocurrency limited gains and kept traders cautious.

Cryptocurrencies in general posted some gains after sharp losses earlier in September, but they lagged behind the rally seen in stocks and gold. The crypto market appeared not to have benefited much from the improvement in risk appetite, even as market bets increased on a rate cut at the Fed’s September meeting.

Bitcoin rose 0.8% to $111,812.8 by 00:51 ET (04:51 GMT), after briefly touching the $112,000 level.

Bitcoin Falters Amid Slumping Crypto Stocks

In recent weeks, markets have faced growing doubts over the long-term returns of corporate Bitcoin-buying strategies, particularly after the currency’s steep drop from record levels in mid-August.

Market reaction was muted to new Bitcoin purchases from leading institutional holders such as Strategy (formerly MicroStrategy, Nasdaq: MSTR) and Metaplanet Inc (Tokyo: 3350). Shares of both companies declined in recent sessions, leading a broader wave of losses in crypto-related stocks.

This strategy, which Strategy had successfully pursued over the past two years, has left corporate stocks more vulnerable to Bitcoin price volatility. Critics have raised questions over the long-term viability of this approach, since it depends entirely on the currency’s appreciation and could be negatively affected by more companies adopting the same model.

It is worth noting that both retail and institutional investors seeking Bitcoin exposure through equities can now simply purchase spot ETFs, which were launched in US markets last year.

Pressure on Circle and Challenges from New Rivals

Shares of Circle Internet Group Inc (NYSE: CRCL) fell to their lowest level in nearly three months on Monday, after Compass Point Research cut its price target on the stock and maintained a sell recommendation.

This came as the company faces growing competition following the announcement by decentralized trading platform Hyperliquid that it will launch its own stablecoin, USDH, to rival USDC.

Hyperliquid holds about $5.4 billion in USDC deposits, which are now expected to be converted into USDH, representing around 8% of the total USDC supply.

Oil prices extended gains on Tuesday, supported by the OPEC+ alliance’s decision to raise production by less than expected, alongside expectations that China will continue stockpiling crude and concerns about possible new sanctions on Russia.

Eight members of the Organization of the Petroleum Exporting Countries and its allies agreed on Sunday to increase their output starting in October by 137,000 barrels per day, far below the increases of about 550,000 barrels per day in September and August.

Brent crude rose 47 cents, or 0.7%, to $66.49 a barrel by 09:10 GMT, while US West Texas Intermediate crude climbed 72 cents, or 1.2%, to $62.98 a barrel.

Ole Hansen of Saxo Bank said: “Prices are consolidating amid speculation that production will not rise by as much as allowed by the eight members, in addition to the fact that China, according to data, has been buying about 0.5 million barrels per day for storage.”

The chief strategist at Gunvor commodities trading noted on Monday that China is likely to continue stockpiling at roughly the same pace in 2026, helping absorb the surplus in global output.

Crude also found support from declining spare capacity within OPEC+, according to Giovanni Staunovo of UBS, who explained that the reduction in the alliance’s reserve capacity limits its ability to respond to sudden supply shocks, which typically supports prices.

He added: “Market awareness that OPEC+ output increases for October may not exceed 60,000 to 70,000 barrels per day is a key factor, along with the fact that the alliance’s spare capacity is much smaller than previously thought.”

Speculation over further sanctions on Russia, following its most intense airstrike on Ukraine that set fire to a government building in Kyiv, also bolstered prices. US President Donald Trump said he is prepared to move toward a second phase of sanctions.

Any additional sanctions on Russia would reduce its oil supplies in global markets, which could push prices higher.

In addition, investors are awaiting next week’s US Federal Reserve meeting, amid expectations of an interest rate cut. Lower rates reduce consumer borrowing costs, which could boost economic growth and increase oil demand.