The price of gold increases when the world is more unstable: yellow metal does not devalue, and in time of uncertainty there are more those who opt for this investment. That’s why “gold loves bad news.”
The price of gold has risen to a new historical maximum over $ 2,900 (4,544 Australian dollars) by jaguar this month.
Climbed 12% since the beginning of the year and clearly exceeded the performance of US and Australia scholarships. The US S&P500 stock rate rose 4% and the ASX 200 earned only 2% in this period.
This follows an extraordinary race in 2024, when the precious metal rose 27%,
What explains the recent rise of gold?
The offer of gold through the production and recycling of gold mines is relatively constant over time. But demand is more variable and consists of four main components: Gospel, technology, investment and central banks.
In 2024, it accounted for about 50% of total demand, technological or industrial demand was 5%, the search for investment was 25% and the demand for central banks was 20%.
Demand for investment refers to investors that They buy gold as an asset. Central banks usually buy gold to diversify their reserves.
Since the four search components vary over time (some more than others), gold price movements are sometimes driven by the search for jewelry, sometimes by searching investors and sometimes – as happened recently – for the search for central banks.
Why is there a gold search?
One of the main reasons for the popularity of gold is that it is considered a Value reserve. This means that gold increases with inflation and keeps its value in the long run.
In other words, a golden jaguar today buys the same cabaz of goods (or more) than 20 years ago. The same is not true of money (or fiduciary currency), such as the US dollar or the Australian dollar.
Since gold maintains its value, it is also designated by inflation protection.
Although reserve ownership remains in the long run, there is another important property that is more ephemeral and particularly relevant during crisis periods.
GOLD: THE SAFE PORTO
Our pricesThe increase when investors seek shelter in response to a shock or crisis. For example, investors bought gold in reaction from the terrorist attacks of September 11, 2001the beginning of the world financial crisis in 2008 and the COVID outbreak in 2020.
Ukraine’s invasion of Russia in February 2022 and subsequent sanctions against Russia showed the risk to governments of lose access to foreign currency.
Apparently, some governments or central banks have reacted to this with an increase in gold purchases. This has led to a maximum history of 1 082 tons of gold shopping by the central banks in 2022.
In 2023, the second highest annual purchase in history was registered, with 1 051 tons, followed by
But in contrast to the shock caused by the Russian invasion of Ukraine, the latest increase in gold prices is harder to associate with a single shock.
Broader economic concerns
Trump’s election not only increased the risk of higher inflation due to customs rights and a trade war, but also increased the geopolitical risk as the US government reassesses its alliances with other countries.
Trump’s relative unpredictability compared to his predecessors and politicians in general may have increased uncertainty and gold prices. The recent trend of the price of gold points out that “Gold loves bad news.”
It is not known precisely why gold rose to historical maximums in 2025, but it is possible that Don’t be good news for the world economy.
