Uncover the factors propelling gold prices to record highs as investor sentiment shifts amid global economic turmoil.
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Gold, which has recently been reaching record highs, is being pushed upwards through a combination of forces, not least of which is a shift in investor sentiment amid economic uncertainty.
The yellow metal soared to a new high at the end of April, going past the $3 500 an ounce mark. Late Last week, it had lost some ground and was trading 0.67% up at $3 326.
Goldman Sachs has raised its forecast price for the end of the year to $3 700 an ounce, according to Reuters.
Casey Sprake, economist at Anchor Capital, explained that the global gold market is experiencing a structural and cyclical shift, driven by surging demand in key markets and a broader realignment of investor sentiment because of economic uncertainty, especially on slower gross domestic product growth in the United States.
“The current gold market reflects a convergence of strong consumer demand, strategic central bank buying, and heightened global economic uncertainty. These forces have positioned gold as both a financial haven and a key indicator of investor sentiment,” said Sprake.
She added that, as the macroeconomic environment remains turbulent, gold is likely to maintain its upward trajectory, influencing not just commodities markets but broader capital allocation strategies across the globe”.
At the heart of this dynamic are India and China: two economic powerhouses with vastly different supply-demand profiles, she said. South Africa’s gold shares also tend to benefit when the gold price gains, with miners earning more per ounce.
Dr Azar Jammine, director and chief economist at Econometrix, has explained that South Africa’s misplaced status as a serious gold producing economy also means that gold miners’ shares benefit.
India, currently involved in a firefight with Pakistan, has an “unmatched” demand for gold, primarily driven by its deep cultural and religious ties to the metal, said Sprake. “Gold is not only seen as a symbol of wealth and status but also as a store of value, particularly in times of financial instability,” she said of India’s relationship with the yellow metal.
Sprake pointed out that, in 2023, India’s consumption was a staggering 50 times greater than its domestic production, which showed just how much it relied on imports. This demand is largely jewellery-driven and reinforced by traditions, particularly in Hindu and Jain communities,” she said.
According to Trading Economics, India’s gold reserves increased to 879.60 imperial tonnes in the first quarter of 2025 from 876.20 tonnes in the fourth quarter of 2024.
China, which produces one third of the gold it consumers, has been “aggressively increasing its reserves, adding 316 tonnes since 2022,” said Sprake. She explained that this reflected a strategic shift by the People’s Bank of Chinato hedge against inflation, reduce dependency on the US dollar, and manage currency risk.
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