Gold continues to rise in price rapidly. Answers to the main questions

This year, gold has risen in price by about 25% — on April 22, the price updated its historical maximum, exceeding $ 3,500 per ounce. A new round of weakening of the dollar, criticism by US President Donald Trump of the head of the Federal Reserve System (FRS) and concerns related to trade wars led to an increase in prices for safe haven assets - this is not only gold, but also the yen and the Swiss franc. Central banks reacted to the instability by buying up precious metals in order to diversify reserves and protect themselves from currency fluctuations. As a result, their actions became a catalyst for the rise in the value of gold. Why the demand and price of gold are growing is in the Izvestia article.

Why does everyone need gold?

• For modern investors, the love of gold is explained by the stability and liquidity of this asset. It is also considered as a means of protection against inflation when the purchasing power of currencies decreases.

• The status of gold as a safe asset has now increased, as the current American president's trade policy has undermined confidence in other traditional instruments of protection against market fluctuations, namely the dollar and government bonds.

• Precious metals are being bought up especially actively in India and China. For example, Indian households own about 25,000 tons of gold, which is more than five times the amount of reserves stored in the American federal vault at Fort Knox.

Is it all Trump's fault?

• Gold prices have soared to record levels this year as the trade conflict unleashed by Trump has destabilized markets, resulting in a decrease in interest in risky assets and an increase in safe haven assets. These assets include, first of all, gold, as well as the Japanese yen and the Swiss franc.

• Trump's policy, which was most likely aimed at increasing the value of government bonds, which were previously considered one of the most reliable assets, led to the opposite effect. Investors, frightened by the instability in the markets and the situation of uncertainty in the United States, began to withdraw capital from government bonds and invest it in gold.

Eternal value: the world's central banks are hastily buying gold before imposing duties

Nevertheless, the return of currency pegging to precious metals is not yet expected.

• At the same time, gold reserves in exchange—traded investment funds have been increasing for 12 weeks, which is the longest period of growth of such reserves since 2022. Trading volumes on the Shanghai Gold Exchange have reached the highest level since 2016, and trading volumes of this precious metal on the Shanghai Futures Exchange have reached a record in the last six years.

Central Banks and China

• Central banks started buying gold even before the Trump trade war. In 2024, metal prices increased, in particular, due to large-scale purchases. In developing countries, which are seeking to reduce their dependence on the dollar, the scale of purchases was most significant.

• According to the World Gold Council, in 2024, central banks purchased more than 1,000 tons of gold bullion — they have about a fifth of all the gold that has ever been mined. One of the leading buyers is the People's Bank of China. In March, the share of gold in its reserves increased for the fifth month in a row.

• According to the Discovery Alert portal, Chinese insurance companies have been ordered to invest 1% of their assets in physical gold by the end of 2025. In addition, the 10 largest state-owned Chinese pension funds are converting 1% of their assets into gold. Taking into account the disguised purchases of gold by the People's Bank of China, the country can accumulate up to 40% of bullion worldwide.

What about the prices now?

• By April 28, bullion had lost 6% in price compared to the record values of the previous week. At the same time, according to experts, it was bought up too actively, so that in eight trading days it rose in price by more than $ 500, and therefore a pause in this dynamic and a slight reduction in risks are expected soon.

Gold tide: how Donald Trump has unleashed the price of the precious metal

Gold is up 10% YTD

• There is a "nervous calm" in the markets right now, analysts say. Investors are following the latest adjustments in US trade policy.

What are the forecasts?

• Gold prices are currently being adjusted, but experts believe that they may rise again soon, as bullion shows the best results in conditions of economic instability.

• Goldman Sachs Group predicts that by the end of the year gold will cost $ 3.7 thousand per ounce, and in the middle of next year the price of the metal may reach $ 4 thousand.