New Delhi [India], March 15 (ANI): Gold prices reached an all-time high, reaching $3,000 per ounce, further solidifying its position as a refuge asset during uncertain times. economic uncertainty .
Based on John Reade, who serves as the Senior Market Strategist, according to him at the World Gold Council Gold has consistently thrived in uncertain times, rising from $1,000 during the financial crisis to $2,000 due to the pandemic, and currently exceeding $3,000 as global instability escalates.
He stated, "Reaching $3,000 an ounce for gold marks a crucial benchmark and underscores the metal’s status as a refuge asset during periods of instability. Having started at around $1,000 during the financial meltdown and climbing to $2,000 amidst the pandemic, gold has demonstrated strong performance both when investors seek safer options and when compared to many other types of assets since 1971."
He stated, "Starting in 2022, gold ceased maintaining its close correlation with U.S. interest rates and the dollar because central banks increased their gold acquisitions twofold, and investment demands from developing countries also rose."
A major factor contributing to the surge in gold prices is the shift in how central banks are acquiring bullion. Starting from 2022, these institutions have increased their gold acquisitions twofold, amassing more than 1,000 metric tons per year, including 1,045 tons bought specifically in 2024.
Reade attributes this increase to various geopolitical elements like de-dollarization, worries about inflation, and economic sanctions. These factors have led central banks to bolster their gold reserves.
He stated, "Geopolitical elements are behind this rise—factors such as de-dollarization, sanctions, and worries about inflation. With ongoing globalization trends, purchases made by central banks will continue to be a significant driver of demand and influence the market’s long-term trajectory."
Moreover, investments driven by emerging markets have increased substantially. In China, where the real estate market is sluggish, investors are turning their attention to gold instead. Meanwhile, in Turkey, demand for gold has risen sharply as families aim to protect themselves against devaluing local currencies. Additionally, in India, reductions in import duties by the government have encouraged more buying of gold.
The latest rally has gained momentum due to escalating economic risks, notably the unpredictability of US tariff policies and trade conflicts. With growing instability in global markets, investors are increasingly looking towards gold as a crucial hedge to safeguard their investment portfolios.
Reade commented, "This prolonged trend has been extended by the recent upsurge, driven primarily by uncertainties surrounding U.S. tariffs and an escalating trade conflict. These factors have heightened economic risks and increased market fluctuations, thereby boosting investors' attraction towards gold as a vital hedging instrument." (ANI)