The price of gold has surged by roughly 44% since May 2024, recently climbing above $3,300 per ounce. Analysts say this steep rally is fueled by a mix of economic anxieties, geopolitical turmoil, and robust demand. Investors have been grappling with persistent inflation and the prospect of slowing growth, driving many to seek refuge in gold’s stable value. At the same time, expectations that the U.S. Federal Reserve will halt or reverse its interest-rate hikes have lowered returns on bonds, making gold more attractive by comparison. Geopolitical tensions – from a protracted war overseas to renewed trade disputes – have also driven global uncertainty to its highest level in years, sending more investors toward safe-haven assets like gold. Additionally, central banks around the world have been purchasing gold at a record pace to diversify their reserves, further bolstering demand for the metal.

Financial experts note that gold’s price tends to spike during periods of high inflation and economic uncertainty. When the cost of living rises and paper currency loses purchasing power, gold often holds its value or even appreciates, helping investors preserve their wealth. Unlike cash or bonds, gold’s worth isn’t directly eroded by rising prices. And in times of crisis or market volatility, gold is seen as a reliable safe-haven asset – investors large and small flock to it during wars, recessions or other turmoil, trusting it to stay valuable when other investments falter. Thanks to this dual role as an inflation shield and a refuge in uncertainty, gold has earned a reputation as “financial insurance,” allowing people to hedge against economic upheavals while keeping their portfolios on steadier ground.

Sources: Gold price analysis from Reuters, CBS News, EconoFact, Tufts Now, Investopedia, and Man Group.