Gold prices surged to fresh record highs, reaching $2,900 an ounce on Friday, amidst growing concerns over global economic uncertainty. Analysts are now discussing a potential $3,000 target, with some even predicting gold’s inflation-adjusted all-time high of around $3,420.
The factors driving this upward trajectory are the same as in 1976: geopolitical tensions, trade wars, and inflation fears. Global markets are experiencing significant fragmentation, making gold an essential global currency that carries no geopolitical risk. Central banks have been major drivers of demand, purchasing over 1,000 tonnes of gold last year, exceeding expectations.
Analysts see central bank demand as a key reason to pay attention to gold. Unlike speculative investors, central banks are serious portfolio managers focused on preserving wealth and purchasing power. They view gold as a “safety blanket” in times of fear, highlighting its potential for diversification and wealth preservation. Even major asset managers like BlackRock see value in gold, with expectations of continued price rises.
As investors continue to navigate global uncertainty, gold’s resilience and demand are worth noting.
Source: https://www.kitco.com/news/article/2025-02-07/forget-nominal-highs-should-we-be-aiming-golds-1980-all-time-high