Gold prices have surged to record highs in Bangladesh Wednesday, reflecting a global rally that has pushed the precious metal to unprecedented levels on the London Bullion Market. Investors are flocking to gold as a shield against economic uncertainty, with analysts at The Gold Bullion Company predicting prices will remain strong through 2025, with only modest fluctuations.

However, Bangladeshi investors are now considering attractive alternatives. The interim government has introduced revised savings schemes, with the Pensioner Sanchayapatra (Saving Certificate) offering annual returns of up to 12.55 percent on investments up to Tk 7.5 lakh. This has sparked a pressing question: Is gold still the safe haven for investors in 2025?

However, most analysts view 2025 as a turning point for gold’s role in personal finance. With values on the rise, the metal is attracting both cautious savers and ambitious investors. Its allure lies in stability, though it is not without trade-offs.

On Wednesday, the Bangladesh Jewellers Association (BAJUS) raised the price of 22-carat gold by Tk 3,044 per bhori (11.664 grams), setting it at Tk 178,832 from Thursday. The price of 21-carat gold was fixed at Tk 170,703 per bhori, 18-carat at Tk 146,313, and traditional gold at Tk 121,166. BAJUS noted that sales include a 5 per cent VAT and a minimum 6 per cent wage component, while making charges vary by design and quality. This was the second increase in less than a week, following a Tk 1,470 hike on 1 September.

Globally, the momentum shows no sign of slowing. Spot prices reached $3,508.50 per ounce on Tuesday, nearly one-third higher than at the start of the year.

Analysts attribute the rally to escalating trade tensions, US tariffs, and expectations of a Federal Reserve rate cut. Adrian Ash, research director at BullionVault, told the BBC that American politics has been a major driver, with last year’s election and subsequent policies fuelling demand for safe assets. Concerns about the Federal Reserve’s independence have further boosted gold’s appeal.

Gold’s reputation as a safe haven is rooted in its resilience during turbulent times. Unlike paper currencies, vulnerable to inflation and oversupply, gold tends to hold its value. It has long been seen as a hedge against inflation, preserving purchasing power when prices rise.

Yet critics argue that in the past decade, gold has often mirrored fragile stock markets rather than moving independently, raising doubts about its effectiveness as a counterweight. For that reason, investors are cautioned not to treat gold as risk-free.

In Bangladesh, the debate is especially pertinent. The domestic market does not always align with global trends, as BAJUS has sometimes raised prices even when international rates fell. Data from 2025 shows steady gains across all categories.

The price of 22-carat gold has risen from Tk 11,955 per gram in January to Tk 15,071 in September, despite a brief dip in mid-year. Similar upward momentum is evident in 21-carat, 18-carat, and traditional gold, all of which have reached record levels.

However, the benefits of investing in gold remain clear. It provides a hedge against inflation, protection from currency depreciation, and a means of portfolio diversification. Its independence from government or central bank policy adds to its appeal in times of political or financial stress. Unlike equities, gold does not generate dividends, but its long-term appreciation has preserved wealth across generations.

However, there are important caveats. Investors must ensure purity and certification to protect resale value. Timing is crucial, as poorly timed entry or exit can erode returns. Costs such as making charges, storage, and taxes reduce profit margins, while liquidity—though generally strong—can be limited in local markets when selling larger quantities.

At the same time, Bangladeshi investors are weighing attractive alternatives. The interim government has launched revised savings schemes, with Pensioner Sanchayapatra offering up to 12.55 per cent annual returns for investments up to Tk 7.5 lakh. Investments above this threshold yield 12.37 per cent.

For amounts up to Tk 5 lakh, there is no tax deducted at source, while higher sums face a 10 per cent levy. The returns are lucrative even on early encashment, making these government-backed schemes a formidable rival to gold by offering certainty where gold does not.

This reflects a broader trend in the country’s financial landscape. Bangladesh’s retirement benefits sector, estimated at $15 billion, is expanding rapidly. Employer-sponsored provident and pension funds contribute over $0.5 billion annually, while the new Universal Pension Scheme could mobilise more than $1 billion each year.

Despite being larger than the life insurance industry, retirement funds remain poorly regulated and under-recognised. Experts argue that proper oversight could strengthen capital markets and secure long-term wealth, multiplying benefits across the economy.

With its young population, Bangladesh stands to gain from a demographic dividend. Directing savings into structured retirement funds could fuel growth while ensuring security for future generations. Policymakers emphasise that reforming the retirement industry should be a priority if the nation is to balance immediate prosperity with sustainable stability.

Against this backdrop, gold’s role as a safe haven appears more complex. It continues to offer protection against inflation and uncertainty, but carries risks, costs, and volatility. For Bangladeshi investors, government savings schemes now provide a strong, predictable alternative.

Investment analysts say gold remains a useful part of a diversified portfolio, but it cannot be regarded as a risk-free refuge. In 2025, the balance between traditional gold holdings and government-backed instruments may well define how investors steer through uncertain times.