The price of gold has increased by 20% since last September and could reach a level never before seen in 2023. This yellow metal is considered the ultimate safe haven, which explains this increase related to geopolitical instability, economic tensions, and inflation.
Indeed, gold has always been the safest haven in times of trouble. With inflation close to 6.2% in France, owning physical gold is a simple solution to preserve one’s investments from the threat of inflation. Gold is a particularly safe and trustworthy asset, demonstrating resilience during times of crisis. Central banks hold significant reserves of the yellow metal to guarantee their independence from the dollar and show confidence in foreign countries. Gold thus constitutes the guarantee of an important intrinsic value and offers an investment free from default risk, unlike bonds or stocks. Euro / dollar fluctuations also play a role in gold investment, as the decline of the single currency tends to drive up the price of gold denominated in euros.
The World Gold Council, which brings together sector players on a global scale, highlights in its latest report the massive purchases made by central banks in 2022, especially those of emerging countries. These purchases reached 1,136 tons, 450 tons more than in 2021, and were concentrated in the second half, with a peak in the fourth quarter, exceeding 400 tons. Overall, demand for the yellow metal increased by 18% to reach a record 4,741 tons, the highest level since 2011.