Gold has ballooned to all-time highs. Investors are rushing to safe haven assets amidst deepening geopolitical tensions and economic uncertainty. The price of gold has increased over 68% this year — the biggest jump since 1979. Gold was priced at the beginning of the year around $2,600 per ounce. Earlier this month, it jumped to a record high, surpassing $4,400 an ounce for the first time in history.
After a brief pullback, on Monday, gold prices hit an all-time high of $4,420. This surge in price can be attributed to expectations that the U.S. central bank will implement further interest rate cuts next year. Investors were increasingly turning to gold as a safe haven from economic downturn.
As BullionVault’s director of research Adrian Ash recently explained, it was the interplay of those short-term and long-term factors driving gold’s price higher. He remarked on the “slow-burning trends around interest rates, around war and trade tensions” that have contributed to the growing investor interest in gold.
The increase in demand for gold has been driven by a weaker U.S. dollar. Consequently, international buyers get the precious metal at lower prices. This powerful dynamic has pulled in a tremendous amount of capital. They are looking to gold because of its safety during anxieties over trade wars and shifting economic policies.
Geopolitical tensions have spiked, particularly with Russia’s war in Ukraine and aggression toward Taiwan. Former President Donald Trump’s tariffs are a particularly powerful example of how market sentiments can be swayed. As Josh Martin pointed out, “You’ve got the trade war, the attacks on the U.S. Federal Reserve and you’ve got geopolitical tensions, all of those provocations come from Trump.” All of these factors combine to foster a real estate investment environment where investors are forced to find ways to protect their assets.