World Gold Council analyzes new gold price milestone

That is what Mr. John Reade, Director of Market Strategy of the World Gold Council (WGC) shared with the press. According to Mr. John Reade, the increase in gold price above the 3,000 USD/ounce mark has brought significant impacts to the global economy . WGC has provided remarkable analysis on the milestone of gold price exceeding 3,000 USD/ounce.

Mr. John Reade, Director of Market Strategy, World Gold Council

- Reporter: Gold price has just surpassed the 3,000 USD/ounce mark, this is a remarkable milestone. Can you share the significance of this event? What factors have contributed to this increase?

+ Mr. John Reade: The rapid increase in gold prices reflects the convergence of many factors, including geopolitical tensions, economic instability and changes in monetary policy. Gold prices have increased from $2,500/ounce to $3,000/ounce in just 210 days - much faster than previous increases. This shows that gold prices have accumulated strong upward momentum over the past two years.

In my article titled “You Asked, We Answered: Gold Hits $3,000,” I provided an in-depth analysis of the gold price. Accordingly, the price of gold hitting $3,000 marks an important milestone and contributes to solidifying gold’s position as a safe haven asset in times of uncertainty. From $1,000/ounce during the financial crisis to $2,000/ounce during the pandemic, gold has proven to perform well in times when investors tend to seek hedging solutions and has returned on par with most other asset classes since 1971.

Since 2022, gold has broken its close relationship with US interest rates and the US dollar as central banks doubled their gold purchases and emerging market investment demand for gold surged.

- How has the role of Central Banks changed in recent years?

+ Central banks have been net buyers of gold for the past 15 years, but in the last three years, these institutions have increased their gold purchases with annual purchases reaching more than 1,000 tonnes from 2022, reaching 1,045 tonnes in 2024.

Central banks have played a key role in driving up gold prices. The continued buying by central banks shows the importance of gold in the official reserve strategy of countries, especially in times of heightened geopolitical risk. This not only boosts gold prices but also shows confidence in the long-term value of gold.

- How do global geopolitical tensions affect gold prices?

+ Global geopolitical tensions play a major role in driving up gold prices. During times of international uncertainty, investors tend to seek gold as a stable store of value. The current geopolitical situation has increased the trend of hoarding gold and contributed to pushing gold prices to record highs.

Geopolitical factors including de-dollarization, economic sanctions and inflation concerns have driven central bank gold purchases. As global economic fragmentation continues, central bank gold purchases will continue to act as a key driver of gold market demand and shape how the gold market operates and develops over the long term.

- How important is the role of investors in emerging markets in the gold market, sir?

+ Emerging markets play a major role in the global gold market. As these economies develop, demand for gold for both investment and cultural purposes continues to increase. This growing demand for gold not only drives global gold prices but also underscores the mainstream appeal of the precious metal.

Emerging market investors are playing an increasingly important role. In China, a sluggish property market has driven investors to gold. In Türkiye, demand for gold has surged as households seek to hedge against a weakening currency, while India’s move to cut import duties has fueled purchases.

- With the current gold price surpassing the $3,000/ounce mark, the big question is: Can the gold price maintain this level, sir?

The recent rise in gold prices has been fueled by uncertainty surrounding US tariff policy and the ongoing trade war, which has increased economic risks and market volatility. These factors have further increased investor interest in gold as an important portfolio diversifier.

While increased risks and uncertainty have boosted sentiment towards gold, for gold prices to remain consistently high, there needs to be increased investment demand. This could be achieved through continued central bank purchases or stronger participation from Western investors.

Whether gold prices can sustain these historic highs remains to be seen. However, one thing is certain: gold’s role as a safe haven asset has become clearer than ever.

Source: https://nld.com.vn/hoi-dong-vang-the-gioi-phan-tich-ve-cot-moc-moi-cua-gia-vang-196250403141404738.htm