The price of gold surged past $3,000 per ounce for the first time in history, fueled by central bank gold acquisitions, global economic fragility, and trade tensions ignited by protectionist policies. This milestone underscores gold’s enduring role as a haven asset in times of market turmoil.
Gold’s ascent to over $3,000 highlights its historical function as a store of value during periods of uncertainty and as a barometer of market fear. Over the past 25 years, gold’s value has increased tenfold, surpassing even the S&P 500’s fourfold growth during the same period.
Anticipation of tariffs led to a surge in US gold prices compared to international benchmarks, triggering a massive influx of gold into America. Over 23 million ounces, valued at approximately $70 billion, poured into the Comex futures exchange in New York between the election and March 12th. This significant inflow contributed to a record US trade deficit in January.
Gold bars stacked on top of each other
Historically, spikes in gold prices correlate with periods of widespread economic and political instability. The metal breached $1,000 per ounce following the 2008 financial crisis and surpassed $2,000 during the COVID-19 pandemic. While prices retreated towards $1,600 post-pandemic, a resurgence began in 2023, propelled by central banks diversifying their reserves away from the US dollar amidst concerns about potential US sanctions.
Early 2024 witnessed another significant price jump driven by increased gold buying in China, reflecting growing anxieties about the country’s economic outlook. The rally gained further momentum after the US election as markets grappled with the new administration’s aggressive trade policies.
“Gold consistently preserves value across a wide range of macroeconomic disruptions,” noted Thomas Kertsos, co-portfolio manager at First Eagle Investment Management LLC. “Throughout history, despite price volatility, gold has demonstrated resilience, maintaining its purchasing power and providing substantial liquidity.” This reinforces gold’s enduring appeal as a safe haven asset in a world facing increasing economic and geopolitical uncertainties.
