[Daily Gold #09] Gold soars in a currency war – why may 2025 could be a strategic time to invest

In May 2025, global currency tensions push gold to record highs. Explore the link between exchange rates and gold prices—and whether it’s the right time to invest. 

                                   

Introduction

By the end of April 2025, international gold prices surged past $2,400 per ounce—a historic record. In South Korea, the market price of physical 24K investment-grade gold exceeded 650,000 KRW per don (3.75g), sparking strong interest among retail investors. But beyond supply and demand, a bigger force is in play: the return of a global “currency war.”

This article explores the impact of exchange rates on gold prices and whether May 2025 marks a strategic moment to invest in gold.

Table of Contents

1. Why Has the Currency War Resumed?
2. The Relationship Between Currency and Gold Prices
3. Three Critical Points Before Investing in Gold
4. Expert Outlook on Gold Prices
5. Real-World Case: KRX Gold Market
6. FAQ: Gold Investing Basics
7. Conclusion: What This Means for You

1. Why Has the Currency War Resumed?

As of mid-2025, the U.S., Japan, and China are each engaged in monetary policy moves that weaken their respective currencies. The U.S. continues a weak-dollar approach, Japan maintains ultra-low interest rates, and China intervenes to stabilize the yuan. These strategies are fueling global exchange rate instability and driving demand for gold as a safe haven.

2. The Relationship Between Currency and Gold Prices

• Strong Dollar → Gold prices tend to fall
• Weak Dollar → Gold prices rise
• Currency Uncertainty → Demand for gold increases

In 2025, the Fed’s pause on rate hikes and ongoing dollar weakness provide a tailwind for gold. Central banks are also ramping up gold purchases, further reinforcing its bullish momentum.

3. Three Critical Points Before Investing in Gold

• Time Horizon: Gold is ideal for long-term hedging, even if short-term volatility exists.
• Watch Exchange Rates: For Korean investors, the USD/KRW rate impacts gold returns directly.
• Choose Your Format: Physical gold offers tax advantages; ETFs offer liquidity and convenience.

4. Expert Outlook on Gold Prices

Analysts forecast gold reaching $2,500/oz if current monetary policies persist. While short-term corrections are possible, most expect a continued upward trend into Q3 2025.

5. Real-World Case: KRX Gold Market

Mr. A, an office worker in Seoul, buys 1g of gold monthly via the KRX Gold Market. “It’s easy, tax-free, and I can physically withdraw the gold if I want,” he says.

The KRX Gold Market offers low fees, transparent pricing, and tax exemptions—making it a solid starting point for new investors.

6. FAQ: Gold Investing Basics

Q: Isn’t it too expensive to invest in gold now?
A: Dollar-cost averaging or phased purchases help manage risk over time.

Q: Will prices drop if the currency war ends?
A: Possibly, but inflation and geopolitical risks will still support gold demand.

Q: ETF vs. Physical Gold?
A: Beginners may prefer KRX or gold savings accounts. Advanced investors often use a mix of ETFs and physical holdings.

7. Conclusion: What This Means for You

In today’s volatile economy, gold is more than just a safe haven—it’s a lens into shifting monetary landscapes. Understanding how currency influences gold can help you invest strategically and confidently.

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