Gold breaks records as digitalisation opens the next wave of demand

Please note this video was filmed on 21 October 2025.

Gold fever has gripped investors in recent months, with the precious metal's rise being nothing short of extraordinary. What began as a quiet hedge against uncertainty has now become a full-blown global phenomenon. 

Long queues have formed in Sydney's CBD, with investors waiting hours for the chance to buy physical gold, while ETFs are recording some of their strongest inflows, and central banks are quietly but aggressively adding to their reserves.

For many, the current dip is not a warning sign; it’s an opportunity. Many would argue that the crowd is no longer driven by speculation, but by a growing belief that gold is becoming a necessity in an increasingly unstable world

This momentum reflects a deeper shift. Rising government debt, political instability and currency debasement are fundamentally altering how investors think about risk. 

And the numbers are extraordinary. Gold has outperformed nearly every major asset class over the past year, not through momentum trading, but through persistent, price-insensitive buying.

Interestingly, gold was also the best-performing asset over the past 20 financial years, as my colleague Vish recently highlighted. No doubt the recent rally helped it get over the line. A reminder that this is not a new trend, but an acceleration of a long-term monetary shift. 

For investors, this creates both opportunity and urgency: opportunity in the form of long-term momentum and diversification benefits, and urgency because the drivers behind this move are not cyclical; they are foundational.

As Shaokai Fan, Global Head of Central Banks and Head of Asia-Pacific at the World Gold Council, told me during our conversation:

“This year has been honestly an astounding year for gold. Up over 60% in US dollar terms right now with approximately 40 or maybe even 45 all time record high new prices.”

This is not a rally built on hype; it is the product of institutional repositioning. Central banks have doubled their annual gold purchases since 2022, investors are reallocating capital in response to weakening confidence in the US dollar, and new digital gold products are opening access to entirely new markets.

In this interview, Fan reveals why the forces behind gold’s momentum are structural, not cyclical, and what it means for portfolios as gold reclaims its place as the world’s most strategic asset.

INTERVIEW SUMMARY

Central banks double down on gold as geopolitical risk takes centre stage

Fan noted that central banks have been net buyers of gold for 15 years, with demand increasing significantly in recent years. 

Between 2010 and 2021, central banks bought just under 500 tonnes of gold annually. Since 2022, that figure has doubled to more than 1,000 tonnes per year.

According to Fan, this acceleration was triggered by the freezing of Russia’s foreign exchange reserves following its invasion of Ukraine. 

“That episode showed that those reserves were not beyond the reach of a foreign power."

Central banks began reassessing the security of fiat reserves and moved into gold because “gold is not issued by any other country” and can be held physically in their own jurisdiction.

This repositioning is not a short-term response. Fan emphasised that central banks will likely remain consistent buyers because gold provides sovereignty, independence, and protection from financial sanctions in a multipolar world.

Investors drive new leg of the gold rally

While central banks remain a powerful force, Fan pointed to a significant shift in 2025: 

“What’s really been a major force in the gold market this year has been those ETF buyers.” 

He noted investor flows have surged in parallel with rate cuts in the US, a weakening dollar, and rising geopolitical tension. 

He also highlighted the psychological component at play: retail and institutional investors now view gold not just as a diversifier, but as a proactive strategic allocation in anticipation of monetary debasement and geopolitical fragmentation.

Gold at the heart of digital transformation

Fan outlined the World Gold Council’s Gold 247 initiative, which is driving the digitalisation of the gold market to ensure it remains relevant in modern financial systems. 

One pillar of this initiative is the Gold Bar Integrity programme, which uses blockchain to track gold “from the moment it’s dug out of the ground…to the moment it becomes buoyant or some other type of gold.” 

This provides proof of origin and ethical sourcing, enhancing trust and potentially increasing investor participation.

Another key development is the emergence of digital gold products designed to give investors around the world access to gold markets where ETFs are not available. 

“New gold digital products might make gold more accessible for those investors too,” Fan said, suggesting that increased access could become a powerful long-term tailwind.

Australia’s rising strategic role in gold

Australia is now the world’s third-largest gold producer, and the government expects gold to become its second-largest export. 

Fan explained that this reflects not only rising prices, but also gold’s increasing economic and geopolitical relevance. 

“Australian jobs will still be well supported by a growing gold market,” he noted, adding that Australia’s deep production capacity gives it strategic influence in shaping global gold markets.

Fan underscored that gold’s rise as a major export is not simply a commodity story; it is part of a broader reconfiguration of global power and capital flows.

What could go wrong? Managing risks in a powerful bull market

Despite his optimism, Fan acknowledged risks investors should monitor. The scale of the rally means gold may now be overweight in some portfolios, prompting potential trimming. A reversal in rate expectations could also act as a headwind. 

“If the Federal Reserve does not cut rates as much as we expect, then that might be a headwind for gold as well,” he said. A strengthening US dollar or easing geopolitical tensions could also temper the rally.

However, Fan was clear in his conclusion: while short-term volatility is possible, the long-term structural drivers behind gold’s performance are unlikely to reverse. “Those factors are going to be persistent,” he said.