Gold has updated its historical high: why prices soared above $3300 per ounce and what it means for the world
17 April 10:40
The global gold market has once again attracted the attention of investors: the price of a troy ounce of the precious metal has exceeded $3,350, setting a new historical record. This rapid growth is not just seasonal fluctuations, but the result of a series of global economic and political shifts that are strengthening the role of gold as a “safe-haven asset,” "Komersant Ukrainian" writes with reference to Reuters.
Analysts point to several key factors that have led to the current growth:
1. Geopolitical tensions and trade wars
Washington’s recent announcements of new duties on critical minerals from China (including nickel, cobalt, and uranium) have sharply strained economic relations between the US and China. Amid uncertainty, investors have traditionally shifted capital to safe havens, i.e. gold, which has long been considered a hedge against instability.
2. Weakening of the US dollar
The dollar index (DXY), which reflects the strength of the US currency against a basket of other currencies, has declined, making gold more affordable for buyers from other countries. When the dollar weakens, gold prices usually rise, as gold becomes cheaper in relative terms for investors outside the United States.
3. Expected reduction in the Fed’s key policy rate
The US Federal Reserve has signaled that it may cut its key policy rate in the second half of 2025. Low rates reduce the profitability of alternative assets (such as bonds), while increasing the attractiveness of gold, which does not generate passive income but benefits from inflation or instability.
4. Purchases by central banks
Global central banks, especially China, continue to buy gold to build up their reserves. Such actions tend to trigger a chain reaction: large purchases drive up prices, after which private investors become more active, expecting further growth.
Forecasts: how much more will gold rise?
Financial giant Goldman Sachs has revised its forecast and expects the gold price to reach $3700 per ounce by the end of 2025. In peak periods, according to their estimates, quotes can range from $3650 to $3950.
“Gold is becoming not just a means of protection, but a strategic asset in an era of global turbulence. We are seeing an increase not only in demand but also in strategic interest in gold from institutional investors and regulators,” Goldman Sachs said in a research note.
What does this mean for investors?
Against the backdrop of general instability, including the war in Ukraine, conflicts in the Middle East, and uncertainty in global monetary policy, gold is regaining its status as a “global insurance policy.” The rise in gold prices indicates a loss of confidence in currencies and stock markets and investors’ willingness to keep capital in a stable, albeit unprofitable, asset.
In addition, more and more countries are considering gold as a way to diversify their foreign exchange reserves, especially in the face of threats of sanctions or financial restrictions from the West.
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