Gold prices surged more than 1% on Monday, reaching a new record high of over $3,380 per ounce as investors flocked to the precious metal in response to escalating global trade tensions and a weakening US dollar. The surge follows a wave of safe-haven buying, reflecting growing concerns about the stability of global markets.
The rally gained further momentum after a post from President Donald Trump on his Truth Social platform, where he emphasized the importance of gold in negotiations. Trump’s message, shared on April 20, read, “The Golden Rule of Negotiating And Success: He Who Has the Gold Makes the Rules. Thank you!” This statement mirrored a similar tweet he made in 2013, further fueling speculation about the strategic value of gold in global geopolitics.
Between 2013 and 2023, several countries significantly increased their gold reserves. Russia’s holdings grew from 1,035 tonnes to 2,333 tonnes, while China’s reserves expanded from 1,054 tonnes to 2,235 tonnes. Turkey also saw a notable rise, from 116 tonnes in 2013 to 540 tonnes in 2023, positioning it as a major player in the global gold market.
Central banks around the world have been acquiring gold in massive quantities. As of December 2024, the United States leads with 8,134 tonnes of gold reserves, followed by Germany with 2,280 tonnes. China and India, with 2,235 tonnes and 876 tonnes, respectively, remain far behind in the rankings.
The global price of gold now hovers near $3,380 per ounce, with some analysts predicting it could reach $3,500 in the short term. In India, gold prices have risen to Rs 96,420 per 10 grams, approaching the Rs 1 lakh mark for 24-carat gold. Over the past 12 months, gold has gained 41%, with several factors pointing to continued upward momentum.
The current gold rush is also tied to recent shocks in the equity markets. Historically, gold has performed well during times of market stress. For instance, during the 2008 Global Financial Crisis, when the S&P 500 plummeted by 57%, gold rose by 39%. Similarly, in 2020, amid the COVID-19 pandemic, the S&P 500 dropped 35%, while gold increased by 32%. Currently, as the S&P 500 has fallen nearly 20% from recent highs due to ongoing tariff wars, gold has surged more than 25%.
Looking ahead, the short-term outlook for gold remains tied to the resolution of the US-China tariff negotiations, the potential impact on the Federal Reserve’s leadership, and fluctuations in the US dollar.
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