Gold's Meteoric Rise: Jewel or Investor's Refuge?

Gold prices have reached unprecedented heights, driven by factors such as inflation fears, geopolitical uncertainties, and increased demand from central banks. As a perceived safe haven and store of value, gold outperforms traditional markets, with its demand influenced by investment, technology, and jewelry sectors worldwide.

In an unprecedented rally, gold prices have surged past USD 2,900 an ounce, marking an all-time high this month. The precious metal's value has climbed 12% since the start of the year, outpacing both US and Australian stock markets. This comes on the heels of a phenomenal 27% rise in 2024, the most significant increase in 14 years.

The factors fueling gold's ascent include inflation anxieties intensified by former US President Donald Trump's tariff threats and heightened geopolitical uncertainties. Central banks have also ramped up their gold purchases as a buffer against the evolving economic landscape. Gold holds its ground as a long-term store of value and a short-term safe haven during crises.

Supply remains steady, but global demand from sectors such as jewelry, technology, and investment continues to fluctuate. As central banks diversify by boosting gold reserves, a weakening US dollar further pushes gold prices higher, underscoring gold's role as a currency hedge amid volatile economic conditions.

(With inputs from agencies.)