LONDON — Gold has surged past $3,000 per troy ounce for the first time in history, capping a rally that has seen the yellow metal nearly triple over the past decade. The milestone reflects a confluence of forces that have made gold — an asset that generates no income and costs money to store — one of the best-performing investments of the 2020s.

The most significant driver is central bank buying. Global central banks have purchased more than 1,000 tonnes of gold annually for three consecutive years — roughly double the pre-2022 average. The People's Bank of China has been the largest buyer, adding approximately 300 tonnes in 2025 alone, as part of a deliberate strategy to reduce the share of US dollar reserves. Poland, India, Singapore, and Turkey have also been large buyers. The motivation is clear: in a world of increasing geopolitical fragmentation, financial sanctions, and frozen reserves (as Russia experienced in 2022), gold held within a country's own borders is immune to foreign freezing or seizure.

Western institutional investors, historically skeptical of gold, have begun allocating as well. The US fiscal trajectory — $40 trillion in debt, $1.5 trillion in annual interest costs, and no political path to stabilization — has led some major asset allocators to conclude that the probability of a secular decline in the dollar's purchasing power has increased materially. Goldman Sachs has set a $3,500 price target for gold by end-2027, arguing that central bank demand and ETF inflows create a structural bid that mining supply cannot meet. The bear case: if geopolitical tensions ease and the dollar strengthens, gold's lack of yield becomes a liability. But in 2026, easing tensions and dollar strength are not the consensus forecast.