Today (March 28 at 1:00 PM) the gold price reached a new record €66,027/ kg

The price of gold continues to rise remarkably. As previously discussed in our newsletters, several factors support this upward trend, including:

1. The Fed hints at an interest rate cut in 2024
2. Central banks are increasing their gold reserves
3. Retail gold investments are rising
4. Real estate crises in China (and the U.S.)
5. Troubles at NYCB, hinting at a banking crisis

Since our last update, a significant event has occurred that impacts the gold market: the attack in Moscow on March 22, which has escalated tensions between the West and Russia, with Russia accusing Ukraine of involvement.

These factors together are driving the price of gold higher. Predicting the future direction of the gold price is beyond our scope, but by analyzing historical peaks, we can conclude that there is still potential for further increase as long as these factors remain influential.

The gold price chart, dating from 1999 to the present, shows that gold reached new highs almost every year after 2008 until 2013, and after a seven-year period, peaked again in 2020. Those who have consistently purchased gold, even at the 'peak' in 2013, have seen long-term profits. Although no investment continuously rises in value, the price of gold has increased by about 45% since January 2020. We continue to monitor global developments that could affect your investment in precious metals.

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It's interesting to note that according to the World Gold Council, 212,582,000 kg of gold has been mined to date. This entire volume of gold would fit into a cube of 22 meters on each side. With the current global population of about 8 billion people, this means that if you own more than 26.6 grams of gold, you have more gold than the average. While this calculation is a simplification and the distribution of wealth worldwide is anything but equal, it gives an interesting perspective.

Central banks own 17% of all this gold, which makes their purchasing behavior an important factor in our analyses. And as mentioned before, central banks have been net buyers of gold in recent years.

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The recent crossing of the $1 trillion threshold in interest payments on the U.S. national debt, visible in the latest FRED data, is an unmistakable signal for investors. These rising costs, exacerbated by the Fed's interest rate hikes, undermine the stability of the dollar and increase the risk to government finances. For gold investors, this underscores the role of gold as a safe haven, free from government bonds and the associated interest rate fluctuations. In an era of increasing monetary uncertainty, gold remains a tried-and-true refuge, making it a more attractive option for those who want to protect their wealth against inflation and currency risk.