It is almost always more instructive to consider inflation when looking at how the value of something has changed over time.

As a fan of classic cinema it can be depressing to look at the highest grossing films of all time and see a list which includes just one film made before this millennium – but adjust this list for inflation and there is a much broader spread across the decades.

The nominal price of lots of goods and commodities will reach record levels with a fair degree of regularity but, by factoring in the impact of price movements, we get a clearer sense of just how much notice we should take of these all-time highs.

In that context, gold achieved a big milestone recently as it took out the previous inflation-adjusted high set in 1980. More than 40 years ago rising prices, a collapsing dollar and geopolitical tensions acted as catalysts for a pretty astonishing bull market in the precious metal. Sound familiar?

The latest driver for the gold price, now up roughly 40% in 2025 alone, and which we suggested could reach $4,000 in the not to distant future back in April, appears to be growing fears about stagflation. Inflation in the world’s largest economy remains sticky while economic data-points continue to point to a slowdown in economic activity.

Longer-term support for gold has come from buying by central banks, which have accounted for 20% of global demand since 2022 compared to an average of around half that between 2011 and 2021 according to Berenberg analyst Jonathan Stubbs. There are reasons to think this trend can continue.

Stubbs adds: ‘According to the World Gold Council 2025 survey, 95% of central bank respondents expect gold-denominated reserves to increase. Central banks highlight crisis performance, inflation hedging, portfolio diversification and geopolitical risk as key drivers.

‘We anticipate demand for gold to remain strong given various risk dynamics, including fiscal dominance/fragility, fiat debasement, financial repression and geopolitical frictions,’ concludes the analyst.

In this, our penultimate issue as a weekly publication, the Shares team highlights the funds they like best from the large universe of options which are available to investors. Next week we will sign off in our current format in a style befitting our name and heritage with a list of our best stock ideas. Look out for that on 25 September.

In the meantime you can read Ian Conway’s thoughts on a trend of mounting bad debts in the US, find out about the latest developments in the investment trust space and some encouraging signs of life in the IPO market on both sides of the Atlantic.

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