On Wednesday, gold soared to an unprecedented high, surpassing $4,200 per ounce. This surge was fueled by both retail consumers purchasing physical gold and central banks stockpiling the metal as a safeguard against currency inflation.
Amidst global economic instability, more individuals are turning to gold as an alternative store of value. On Thursday, local media Nightly News reported a long line of customers outside the ABC Bullion precious metals shop in Sydney, Australia.
The queue stretched nearly 200 feet around midday. Many waiting cited economic uncertainty, the weakening US dollar, and distrust in financial institutions as their reasons for investing in physical gold.
According to Yahoo Finance data, the price of gold has surged approximately 61% since the beginning of this year.
The price of gold has reached a record high above $4,200 per ounce. Source: TradingView
This August marked a significant shift when gold surpassed US Treasurys in central bank reserves for the first time since 1996, now constituting over 25% of global reserves according to economist Mohamed El-Erian.
This development highlights a broader trend towards assets perceived as safe havens. Analysts from The Kobeissi Letter observed:
“Gold, Silver, & Bitcoin are now among the top ten largest assets globally – & a testament to their status as safe-haven investments that typically appreciate when stocks decline ”
Kobeissi Letter also noted that with Bitcoin (BTC) and Gold reaching all-time highs this year could be disastrous for USD performance not seen since 1973 due largely due currency debasement alongside waning trust traditional institutions often serve catalysts bearer hard money stores-of-value like these
Gold overtakes US Treasurys within worldwide central bank reserves percentage-wise Source: Mohamed El-Erian
Related: The correlation between Bitcoin & Gold strengthens while BTC follows similar paths toward becoming reliable stores-of-value assets themselves
An Ongoing Debate Over Bitcoin’s Role As A Store-Of-Value Asset Persists Among Analysts