- Since time immemorial, especially for humankind irrespective of social standing, gold as a metal has always been accorded a critical position in every matter of our existence, providing confidence, heft, traction, and a sense of fulfillment even during dire times. Of course, gold is not only viewed as an evergreen investment that comes to the aid during tough periods, but also an investment that never heads southwards, even as economies around the world struggle to stay afloat. Right from the first recorded human civilization unearthing the immeasurable potential of gold, the clamour to own the precious metal hasn’t subsided one bit. So much so that the modern-day world also continues to witness the same clamouring for the gold unhindered.
PC: NewsThump
- Possession of gold is a status symbol, and even families struggling to meet ends would not mind going the extra length to possess the same. That’s the power of the gold, rain or shine, gold will glitter. Investors spooked by Trump’s destructive policies have sought safety in gold, but expecting an endless rally would be a mistake. As reported, gold crossed the $4,000 per ounce milestone last week. That’s over Rs. 1.2L per 10g in Indian market terms, an all-time record. The world’s 7.2L centenarians will remember a time when an ounce, 28.3g, used to be worth $20.7. In fact, this rate largely held steady for a century from 1834 to 1934, when it was raised to $35 and maintained for the next 34 years. Gold was a stable commodity, stabilizing the global economy back then.
PC:KITCO
- Now, it’s a hedge, which explains why its price soars at the first sign of trouble. That sign this year is Trump – born in the $35 era and now going on 80. Gold was at $2,700 on the day he was sworn in eight months ago, so it’s gained about 50% already. It hit $3,000 in March when Trump amped up talk of tariffs and spread uncertainty, crossing $4,000 now amid delayed US financial data and a US govt shutdown. Goldman Sachs sees it hitting $4,900 by December next year – over Rs. 1.5L per 10g. Of course, predictions are based on assumptions and shouldn’t guide action. When gold went from $38 per ounce in 1972 to $850 in 1980, financial advisers would have egged you on to buy more of it. But by 1999, it crashed to $251. In 2022, gold tumbled from $2,000 to $1,600.
PC: PBS
- What Trump does next will certainly determine gold’s trajectory, but unexpected events can overtake him and the rest of us. Gold crossed $1,000 amid the 2009 financial crisis and $2,000 during the pandemic. Both times, fears of inflation from massive government stimulus spending – over $20tn in the first five months of the pandemic – started the dash for the safety of gold. Trump’s ad-hoc policymaking is affecting confidence beyond US borders. That’s why central banks have been lapping up gold too. As savers and investors, the thing to remember is that the surge in gold’s price isn’t organic. Gold is a haven, but this mad rush could end in a stampede. Exercising caution is key to ensuring someone’s lifetime savings do not go down the drain.
