Gold Prices Soar Past $4,400: Humphrey Yang Explains Why and How To Protect Your Portfolio

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As noted by Morgan Stanley, gold prices have risen by about 50% in 2025 and crossed $4,000 per ounce in October. The investment bank estimated prices could reach $4,400 per ounce in 2026, which they already surpassed as of late December.

Gold’s recent returns can sound impressive when compared to those of popular stocks and cryptocurrencies, but it’s important to consider what may be causing this explosion and whether it will likely continue.

In a recent video, financial YouTuber Humphrey Yang discussed four reasons that could explain gold’s popularity in 2025. He also shared his thoughts on adding gold to your portfolio.

1. Gold’s Relationship to the US Dollar

Yang described the inverse relationship between gold and the U.S. dollar. A rising dollar usually corresponds with a falling gold price, while a falling dollar usually drives gold’s price up.

According to T. Rowe Price, devaluation has been an issue for the U.S. dollar this year, and it will likely continue due to concerns about the Federal Reserve, federal budget, monetary policy and other factors. Devaluation can prompt international investors to explore different options, like gold, to hedge their risk. This can further hurt the U.S. dollar’s value and help gold prices.

2. Inflation

The latest September 2025 Consumer Price Index data showed an annual inflation rate of 2.7%, which is above the Fed’s 2% target. When people are worried about the value of their money declining, they may find gold appealing since it’s something limited and tangible.

But while inflation can drive gold’s demand and value, Yang explained the relationship isn’t always predictable. For example, he noted gold prices had periods of stability and decline during the 1990s and increases during the 2000s, both decades with relatively moderate inflation levels.

Yang added, “So what that means is that while inflation is going up and gold is marketed as an inflation hedge, it doesn’t always mean that just gold will go up in value because there is inflation.”

3. Central Bank Policies

Yang discussed how foreign central banks are opting for more gold than U.S. Treasuries in their reserves, which hasn’t happened since 1996. China has been one of the major buyers in 2025. This trend shows gold has become more appealing for governments seeking diversification, as it doesn’t require worrying about default — though the U.S. dollar remains popular.

Yang added, “I personally don’t think that the U.S. dollar is going anywhere anytime soon or is going to be dethroned as the world reserve currency, but that could change in, let’s say, the next 10 or 20 or 30 years.”

4. Global Uncertainty

International conflicts, trade tensions and general instability can cause people to panic and feel uncertain about the markets. This can make them turn to gold for safety in case of economic downturns. For example, after President Trump threatened new China tariffs in Oct. 2025, gold prices reached new records, Reuters reported.

Yang explained, “Historical analysis shows that during periods of heightened geopolitical uncertainty, gold has delivered average weekly returns — weekly returns — of approximately 1.6% while equity markets often experience simultaneous declines.”

Yang’s Tips for Your Portfolio

Ultimately, Yang recommended diversifying and sticking with having only 3% to 10% of your portfolio in gold and other alternative investments. You should also be prepared for some uncertainty; Yang showed there are sometimes flat or negative returns over time, such as from February 2012 to June 2020.

As for future prices, Yang suggested future Fed rate cuts and higher retail demand might be good news for gold, while a rise in the U.S. dollar’s value or stabilizing geopolitical conditions might hurt gold prices. You can keep an eye on gold price trends using a site like Bloomberg and work with a financial advisor for guidance.

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