Gold has reached record heights in recent times, the price of GOLD spot reaching $ 3,357.40 (£ 2,532) per OCE for the first time on Wednesday.
He marked an increase of about $ 700 (£ 528) this year and comes at a time of significant uncertainty on Donald Trump Import prices in the United States.
It is not a coincidence.
Indeed, gold is a tangible commodity – a physical good that can be purchased and sold.
Gold prices fell by more than 1% Thursday after a sharp increase in the previous session, investors reserved profits before a long Easter weekend.
The goldcorp Goldcorp mine opened in Penasquito, Mexico. Pic: Reuters
It is estimated that 3,000 tonnes are operated each year, China operating the most gold in 2024, followed by Russia, Canada and the United States.
And the Bank of England holds the second largest trove in the world, with around 400,000 gold bars worth billions of pounds seated in its chests.
So why does it increase in value?
Gold considered a “refuge”
Precious metal is known as a “safe refuge” – an asset that generally retains or increases in value during the market turbulence or economic uncertainty.
The gold bars are exhibited in a gold jewelry store in the city of northern India in Chandigarh. Pic: Reuters
Investors generally flock to shelters to protect their capital from losses when the markets are volatile.
It is therefore not surprising that its value has skyrocketed at a time when markets around the world were unstable by the introduction and temporary return of some American prices.
“Gold remains strongly supported by a largely lower dollar, uncertainty concerning the announcements and fears of prices concerning a global recession,” said Lukman Otunuga, main research analyst of the FXTM online broker.
The dealer based in Singapore, the director general of Goldsilver Central, Brian Lan, added: “Gold will continue to be strong as long as there is uncertainty.”
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Gold has seen a similar wave at the start of the covid-19 pandemic, but has been on an upward trend for years.
Popular investment, but not without risk
Those who are in favor of investment in gold maintain that it can be used to diversify and balance your investment portfolio, as well as to attenuate the possible risks on the road.
Some also comfort themselves to buy something tangible that has the potential to increase value over time, and which is not directly linked to global currencies.
But gold skeptics warn people to be wary.
The Commodity Futures Trade Commission previously warned that precious metals can be very volatile, and prices increase as demand increases – which means “when anxiety or economic instability is high, people who generally benefit from precious metals are sellers”.
This adds that if you choose to invest in gold, it is important to educate yourself on safe negotiation practices and to be careful with scams and potential counterfeits on the market.
And although gold being a tangible currency is in many ways considered as a plus, it also means that it can run out; And some analysts believe it will do so in less than three decades.
You can find out more about the impact of a gold shortage here.