Gold has risen by more than 50% this year. Prices topped $4,000 per ounce in October and reached a record high of $4,381. This surge reflects shifting gold and oil market sentiment, driven by political uncertainty and long-term economic concerns that are pushing investors toward safe-haven assets.
According to Reuters and the World Gold Council, the rally reflects strong central-bank buying, increased inflows into gold-backed ETFs, and a weaker U.S. dollar. Together, these factors continue to support gold prices and reinforce defensive positioning across commodity markets.
Oil, by contrast, has faced sustained pressure. WTI crude briefly fell into the low-$60 range in April, its lowest level since 2021. Higher OPEC+ output, trade uncertainty, and slower global growth weighed on prices, which hovered near $59 per barrel toward the end of November. This growing divergence between gold and oil sets the stage for analysing how different commodities respond to changing market sentiment.
Inflation, real yields and what drives gold in 2025
Gold is often viewed as an inflation hedge, but its price does not always track monthly CPI data. Research from the World Gold Council and academic studies shows that real interest rates have a stronger short-term impact on gold prices. Over longer periods, falling real yields tend to support gold’s ability to preserve value and shape broader gold and oil market sentiment during times of economic uncertainty.
Even with oil prices remaining low this year, gold has continued to rise. Energy prices are no longer driving inflation in the way they did during past commodity shocks. However, trade tensions, policy uncertainty, and persistent fiscal deficits continue to weigh on investor confidence.
These concerns have supported higher gold prices, even as gasoline costs remain relatively stable. In this context, 2025 appears less like an inflation-driven rally and more like a search for insurance against policy missteps, geopolitical risk, and currency volatility. Strong central-bank demand and renewed interest in gold-backed ETFs continue to shape gold and oil market sentiment.
Why gold and oil market sentiment often diverges
It may seem logical that two major commodities would move in the same direction. However, history often shows otherwise. Macroeconomic conditions play a key role in shaping their relationship. When global growth is strong and commodity demand rises, gold and oil can advance together.
During periods of market stress, investor behaviour shifts. Demand moves toward safe-haven assets, which pushes gold higher while oil prices tend to fall. Studies covering the period from 2000 to 2025 show long stretches of weak or even negative correlation. This pattern highlights how gold and oil market sentiment can diverge sharply in uncertain conditions.
One simple way to assess this instability is the gold-to-oil ratio. According to DWS, the ratio has averaged around 18 since 2000, but it tends to rise during downturns. It increased in 2016 and 2020, and this year it climbed above 40 as gold surged and WTI declined. For traders, sharp moves in the ratio often signal concerns about oil demand, geopolitical shocks, or a broader flight to safety.
What the divergence means for the XAU vs. WTI trade
For investors tracking the XAU vs. WTI pair, the current divergence shows how differently these assets respond to the same market news. Oil prices are driven mainly by real-economy demand and supply decisions from producers. Gold, by contrast, reacts more strongly to policy credibility, geopolitical risk, and changes in long-term inflation expectations.
Such extreme divergence rarely lasts. However, it often reveals where market anxiety is concentrated. In 2025, those concerns focus on politics, trade tensions, and long-term debt sustainability. These factors continue to support gold and shape broader gold and oil market sentiment.
For traders looking to express views on gold and oil market sentiment, platforms such as Xlence provide access to instruments like XAU and WTI, along with real-time pricing and risk management tools.
First-time buyers surge in 2025
BullionVault’s director of research, Adrian Ash, said that gold and silver have reacted to the first year of Donald Trump’s return to the White House in a similar way to the banking crash or the Covid pandemic. He noted that gold priced in British pounds has now set new month-average records for 16 consecutive months.
Ash described this as “an unprecedented stretch of new all-time highs”, lasting twice as long as the rally seen during the oil and inflation crisis of 1973.
Ash suggested that the current surge in gold and silver prices may eventually cool. However, he added that the long-term bull market in hard money assets appears far more difficult to halt.
“Given next year’s geopolitical outlook and Trump’s influence over the Federal Reserve, the underlying uptrend in bullion prices looks set to continue.”
Over the past year, BullionVault has seen a strong increase in new demand. The platform is now used by 120,000 people worldwide and holds a record £6.1 billion in gold, silver, platinum, and palladium. The company reported that the number of first-time bullion buyers has risen by 121.7% compared with 2024.
Ash explained that the key difference between 2025 and previous surges in precious metals demand is investor positioning. He noted that Western investors held far less bullion going into the financial crisis and the Covid pandemic.
As a result, this year’s rush has been partly offset by ongoing profit-taking among existing investors as prices continue to rise.
Investor sentiment shifts in the gold market
Including existing customers, the number of investors buying gold in November fell by 38.8% from October’s near-record level. That October figure had been the strongest since March 2020. Gold sellers declined at a similar pace, dropping 39.3% from October’s all-time high.
Together, these moves pushed the Gold Investor Index down by 3.2 points from its 56-month peak. The index measures sentiment based solely on physical bullion activity and remains a key indicator of gold and oil market sentiment during periods of uncertainty.
Any reading above 50 indicates more buyers than sellers. The Gold Investor Index reached its all-time high of 71.7 during the global financial crisis in September 2011. It also climbed to 65.9 during the early months of the Covid pandemic in March 2020.
Historical context and recent extremes
In March 2024, the Gold Investor Index fell to an all-time low of 47.5. This marked only the third time in its history that selling outweighed buying, highlighting a rare shift in investor behaviour.
Despite this volatility, gold has continued to attract attention in 2025. According to BullionVault’s director of research, Adrian Ash, long-term investors are trimming holdings to rebalance portfolios. Meanwhile, new buyers are already seeing significant gains.
Ash noted that first-time gold investors in 2025 were more likely to sell part or all of their holdings in November. This behaviour was more common than among any other group of BullionVault users.
Buying gold at any point between January and November would now show an average gain of 24.3% in GBP, net of all costs on BullionVault.
Silver sentiment and broader market signals
In tonnage terms, gold’s record prices last month saw selling slightly outweigh buying. However, in value terms, total holdings still rose by 3.4% in GBP, reaching a sixth consecutive month-end record of £4.4 billion.
Silver showed a sharper sentiment shift. The number of people buying silver fell by 46.4% from October’s 56-month high. This decline cut 6.6 points off the Silver Investor Index, marking its steepest drop since the retreat from the Covid crash spike in early 2020. The index now stands at 52.1, its lowest level since August.
Together, these movements across precious metals reflect changing investor behaviour and offer further insight into evolving gold and oil market sentiment as markets balance optimism with underlying stress.
What gold and oil market sentiment signals for 2026
Unlike the precious metal surges of 2011 or 2020, wider financial markets have not shown extreme stress this year. On the contrary, global equity markets have continued to climb to new all-time highs.
However, concerns are growing around a potential correction in 2026, particularly linked to an overheated AI-driven rally. If the current equity boom turns into a downturn, analysts suggest that demand for rare, physical bullion could increase again, reflecting shifting gold and oil market sentiment as investors look for protection.
Disclaimer: This information is not considered investment advice or an investment recommendation, but instead a marketing communication.
