In December 2025, the over-the-counter retail price of gold at bullion giant Tanaka Kikinzoku rose to 24,414 yen per gram. As the benchmark for domestic retail gold prices, it has continued to set record highs.

Just five years earlier, in 2020, gold traded around 5,500 to 6,800 yen per gram. A weaker yen combined with rising international prices has pushed the level up nearly fourfold. Compared with the 1970s it is more than ten times higher—a historic high for the gold market.

The Main Drivers Behind the Surge

Rising Geopolitical Risk

The prolonged war in Ukraine, tensions in the Middle East, and friction over the Taiwan Strait have kept conditions unstable worldwide. When such risks surface, investors tend to pull money from equities and bonds toward gold as a safe haven. Demand jumped after Russia's 2022 invasion, lifting prices.

Heavy Central Bank Buying

Central bank gold purchases have run above 1,000 tons a year since 2023—roughly 30% of annual production—providing strong support. Emerging-market central banks, notably China's, have accelerated a "move away from the dollar, buy gold" stance to diversify their reserves.

A Persistently Weak Yen

Interest-rate gaps between Japan and the U.S. have kept the yen weak against the dollar. When the yen weakens, the yen-converted gold price rises even if the international price is unchanged. The Trump administration's tariff moves in April 2025 also spurred dollar and gold buying.

Supply Constraints and Firm Demand

Mine output is hard to expand quickly, and new mines take years and large investment to develop. Meanwhile gold is used not only in jewelry but widely in industry, such as semiconductors and electronics, so demand is unlikely to collapse. Per the World Gold Council, gold demand in the July–September 2025 quarter reached a record high on a quarterly basis.

Growing Institutional Demand

Because gold earns no interest, it was long overlooked, but the "risk of not holding it" has come into focus. Experts say buying by Western fund managers and Japanese investors, drawn by gold's performance, drove the sharp rise from September 2025.

Platinum and Silver

Platinum

Platinum has long drawn demand as an automotive exhaust catalyst, but the spread of electric vehicles raises concerns about shrinking catalyst demand. Even so, demand from hydrogen fuel-cell vehicles and industry, plus its scarcity, points to a degree of resilience. In 2025 it rose 84% year-to-date, outperforming gold (as of December 1).

Silver

Silver demand is expanding in green-energy fields such as solar panels, with industrial demand also firm. Supply is several times that of gold, so prices are relatively low, but the growth of renewable energy is a long-term tailwind. In 2025 its investment performance was up 96% year-to-date, far above gold's 61% (as of December 1). With gold arguably overheated, investors also turned to the relatively cheaper silver and platinum.

The 2026 Outlook

Many experts are bullish on gold for 2026, with a number expecting a rise toward around $5,000 per troy ounce on international markets—though some warn of a pullback after such a steep climb.

Cited supports include the reduced appeal of the dollar as the U.S. cuts rates, alternative demand amid wariness of high equity valuations, political and fiscal uncertainty heading into the November 2026 U.S. midterms, and continued central bank buying led by emerging markets.

Platinum and silver, backed by growing demand in hydrogen and green energy, are also expected to find support from both industrial and investment sides in 2026. Prices can move in either direction, however, so nothing is certain.

A Long-Term View

Some experts argue that gold has risen substantially over the past 50 years and, if government debt keeps swelling and currencies keep being diluted, has room to rise further over the long run—a reading in which geopolitical risk, a move away from the dollar, and currency dilution reinforce one another.

Still, such long-term projections are only one scenario. Gold has entered corrective phases after sharp rallies before, and no future price is guaranteed.

In Summary

Gold's record high reflects a structural shift—geopolitical risk, central bank behavior, supply constraints, and institutional inflows overlapping—rather than a fleeting spike. Gold, platinum, and silver each have distinct demand drivers and are gaining standing as tools for portfolio diversification.

At the same time, buying at high levels carries real risk. This article is for information only; investment decisions should be made carefully, in light of your own circumstances and, where appropriate, with professional advice.