Gold Rush 2025: Why Everyone is Turning to Gold, and What it Means for Africa

Kenya, 23 October 2025 - The world is in the middle of a gold fever not seen in decades.

From New York to Nairobi, investors are rushing to buy gold as prices soar to record levels, shaking up financial markets and sparking debates about what this means for developing economies like Kenya.

Last week, global spot gold prices surged past $4,200 per ounce, according to Reuters, the highest level in history, driven by a mix of economic uncertainty, U.S.–China trade tensions, and expectations that the U.S. Federal Reserve will soon cut interest rates.

Financial giant HSBC now predicts that gold will average $3,355 per ounce in 2025 and could reach $5,000 by mid-2026, while Goldman Sachs analysts say “institutional and private investor flows could push gold beyond $4,000 if momentum continues.”

But why gold, and why now?

In times of crisis, gold becomes more than just a shiny metal; it becomes a symbol of safety.

“When investors fear inflation or political instability, gold feels like a safe home for their money,” said Dr Peter Kinyua, a Nairobi-based financial analyst.

“It’s not about quick profits, it’s about protection.”

The ongoing gold rush is being fueled by a mix of global economic and geopolitical factors. Escalating tensions between the U.S. and China have made investors wary of volatile assets, driving them toward gold as a safe haven. At the same time, expectations that the U.S. Federal Reserve will cut interest rates have made gold even more attractive since it retains value when interest-based assets weaken.

Adding to the surge, major economies such as China and India are expanding their gold reserves to reduce dependence on the U.S. dollar. A weakening dollar has also made gold cheaper for investors using other currencies, further boosting demand. Meanwhile, what began as a hedge against uncertainty has turned into a wave of speculative buying, with Reuters reporting that a sense of “FOMO” fear of missing out, among retail traders has intensified the rally.

What it means for Africa

Across Africa, the effects of this global gold rush are already being felt.

Gold-producing countries like Ghana, Tanzania, and Sudan are seeing renewed investor interest and higher export revenues.

Kenya, though a smaller player, could benefit from increased artisanal mining and new exploration licenses.

However, experts warn that the boom also brings risk.

“When gold prices rise this fast, unregulated mining surges,” said Dr Muna Oketch, an economist at the University of Nairobi.

“That can lead to environmental damage, safety issues, and exploitation in informal mining communities.”

African governments are now facing a policy dilemma, how to harness the windfall from higher gold prices while maintaining economic stability and protecting local ecosystems.

Kenya’s gold production remains modest, about 1 ton per year, according to the Ministry of Mining, but rising global prices could renew focus on small-scale mining in western regions such as Migori and Kakamega.

Financial experts say a well-regulated gold trade could also strengthen the shilling by boosting export earnings and attracting foreign exchange reserves.

Still, caution is advised. As HSBC notes, “Temporary surges can tempt policymakers to spend more,” while the underlying current account deficit, around 5% of Kenya’s GDP, remains a structural challenge.

The bigger picture

Globally, gold is now at the center of the ongoing U.S.–China economic rivalry, as nations diversify away from the dollar and hedge against geopolitical risks.

While some celebrate the metal’s rally as a sign of strong investor confidence, others worry it’s a warning sign, a reflection of deep anxiety about the world economy.

As Dr Kinyua put it, “When gold shines this bright, it usually means the world is nervous.”

Editor’s Note

The current rally cements gold’s timeless role as both a financial shield and a mirror of global uncertainty, reminding Africa, once again, that even the world’s safest asset carries its own risks when the global economy trembles.