In a notable milestone for the gold market, prices have surged to a new all-time high, surpassing $2,400 per ounce in 2024. This surge signals a significant shift in the gold trade, prompting companies like Degussa to prepare for further price increases and expand their operations into additional countries.
Andreas Hablützel, CEO of Degussa Goldhandel Switzerland, highlighted the factors behind this remarkable price surge. He noted that alongside the rising value of cryptocurrencies, the price of gold has been on an upward trajectory, exceeding $2,000 per ounce for the first time last March and briefly touching $2,400.
The surge in gold prices is driven by various factors, including heightened global tensions and increased central bank buying worldwide. Ongoing geopolitical risks from conflicts involving Ukraine, Russia, Iran, and Israel have amplified the demand for gold as a safe-haven asset.
Hablützel emphasized the changing sentiment towards traditional currency systems, stating that people increasingly seek to diversify their wealth outside the fiat system by investing in assets like gold or cryptocurrencies.
He highlighted three primary factors driving the recent surge in gold prices. Firstly, China’s shift from dollar reserves to gold has accelerated the buildup of global gold reserves. Secondly, there is a global shift away from fiat currencies towards gold due to decreased confidence in traditional currencies like the euro, exacerbated by economic problems in the EU. Lastly, growing geopolitical uncertainty in the Middle East, particularly involving Israel and Iran, has further fueled gold’s appeal as a safe-haven asset.
Despite acknowledging the potential for a price correction amid overbought conditions, Hablützel remains optimistic about the long-term trajectory of gold prices. He believes that the current surge is just the beginning of a sustained upward trend driven by declining confidence in major currencies like the euro and the dollar.
In line with its expansion plans, Degussa is considering entering new markets, including Singapore, by 2025. This strategic move reflects a shift towards serving professional financial institutions like family offices and wealth managers, rather than retail customers.
Degussa’s recent realignment, under new management led by François von Finck, signals a generational change aimed at revitalizing the company’s focus on core gold products like bars and classic coins.
The evolution in leadership and strategic focus underscores the enduring relevance of gold as a millennia-old trading commodity amidst evolving global economic dynamics and shifting investor preferences.
