Will the gold price bubble continue? The most prominent rises and falls of the yellow metal

A price bubble is an economic phenomenon that occurs when the price of an asset rises, such as A bubbleis usually when expectations of rising prices prompt investors to buy heavily, which abnormally increases demand and raises prices further.

This rise entices more investors to enter, so the pace of buying accelerates and prices inflate away from the actual market fundamentals.

This excessive buying of gold is usually due to multiple factors, including Financial and political crises, mass speculation, and the expectation of quick profits, in addition to the impact of monetary policy, inflation, and the decline in the value of paper currencies.

These bubbles often do not last long; As investors realize that prices are exaggerated, a collective selling process begins, causing a sharp and rapid decline.

The early 1970s saw an unprecedented rise in Gold prices, after US President Richard Nixon abolished the Bretton Woods system in 1971, ending the dollar’s ​​connection to gold. As prices were freed from government restrictions, they began to rise from about $35 per ounce to higher levels with increasing demand.

Other factors also helped to inflate prices during that period, such as the oil crisis in 1973 and the slowdown of the economy, which led to the erosion of the value of paper currencies, so that gold became a convenient means of preserving wealth.

The Cold War and events in the Middle East had a clear impact. also; Investor fears increased and supported demand for gold as a safe haven. The expectation that prices would continue to rise prompted more investors to buy quickly.

In January 1980, gold reached its peak, recording about $850 per ounce, a record at the time. However, as the US Federal Reserve raised interest rates sharply to control inflation, prices began to fall rapidly. This sudden change in monetary policies led to a loss of confidence and the surrender of investors, causing prices to collapse within a few months.

In September 2011, the gold market witnessed a historic jump that brought prices to record levels exceeding $1,900 per ounce, becoming one of the most important stations in the history of modern gold. This rise was not a coincidence, but rather came as a result of the interaction of economic and geopolitical factors that worried investors and pushed them to search for a safe haven.

During the Corona pandemic in 2020, gold ranged between $1,700 and $1,900 per ounce, before it rose at the end of the year to $2,135.

In 2025, with US President Donald Trump’s customs policies, and fears of a global recession and economic pressures, the price of an ounce of gold broke the $3,500 barrier for the first time in history, continuing to rise to reach more than $4,050, achieving unprecedented gains amounting to more than 52% since the beginning of the current year.

The most prominent reasons for this sharp rise are:
– Global Financial Crisis (2008–2010): The repercussions of the crisis lasted for years and weakened confidence in banks and traditional currencies.

– Quantitative easing programs and lowering interest rates: Expansionary monetary policies in the United States and Europe increased fears of inflation, which made gold more attractive.

– Geopolitical turmoil and the European debt crisis: Tensions in The Middle East and the Eurozone crisis have increased demand for gold as a safe haven.

But this rise did not last long; As the US economy gradually improved, and the Federal Reserve began to consider reducing quantitative easing, gold prices began to gradually decline from 2012 onwards. Overconfidence declined, and prices fell to less than $1,200 per ounce by 2013.

Gold also has its fluctuations and collapses, the most notable of which is in July 1970 when the price of gold reached about $291, due to the strength of the dollar and the American economy, which is the lowest price of gold in more than 100 years, as its price reached $327 in August 1920.

And in 1999 The price of gold fell to about $253 as a result of the strength of the US economy, the dollar, and the surplus supply from central banks.

In the years 2013–2014, the US quantitative easing policy led to a decline in gold from $1,695 to $1,200 by the end of 2014.