Why is the world gold price increasing rapidly and showing no signs of stopping?

Specifically, at 11:45 London time (ie 17:45 Hanoi time), the spot gold price increased by 0.5% to 2,342 USD/ounce, after soaring to a record high of 2,353 USD/ounce at the beginning of the session. According to records, the price of this rare metal has continuously reached record highs in recent weeks.

According to experts, strong buying by central banks, capital flows into safe assets amid rising geopolitical risks and demand from funds have pushed gold prices up 12% since the beginning of the year.

World gold prices continue record increase

Global central bank gold reserves rose by 19 tonnes in February, the World Gold Council said, marking the ninth consecutive month of growth, but the data showed a slowdown, with February purchases down 58% from January. In the first two months of 2024, central banks added 64 tonnes of gold to their reserves, down 43% from the same period in 2023 but four times higher than in 2022.

Meanwhile, US job growth exceeded expectations in March, a sign that the US economy ended the first quarter of 2024 on a solid footing. As a result, the US Federal Reserve (FED) is likely to delay cutting interest rates this year.

In addition, growing global geopolitical concerns have increased demand for gold. The Russia-Ukraine conflict continues to escalate, with the latest attack on the Zaporizhzhia nuclear plant causing further instability. Meanwhile, in the Middle East, concerns about a conflict between Iran and Israel persist, although Israel is reportedly holding peace talks with Hamas in Egypt.

Kyle Rodda, market analyst at Capital Commodities and Precious Metals, said there are signs that the market is overly optimistic about the outlook for gold at current levels. “ Geopolitical tensions in the Middle East could be another driver for gold prices,” Rodda said.

At the same time, investors and governments are wary of the consequences of these wars and gold is one of the most effective hedges against these concerns.

Data from BullionVault, the world's largest online gold marketplace, shows Western investors made record profits from selling gold in March, selling nearly twice as much as they bought.

“ Gold sellers also peak when bullion prices spike, all of which coincide with periods of extreme political or financial stress, driving stronger investor demand,” said Adrian Ash, director of research at BullionVault.

“ Gold prices have increased exponentially as the uncertainty surrounding global conflicts continues ,” Adrian Ash stressed.

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