The price of gold keeps rising, reaching a record of 58,000 euros per kilogram bar.

Even the 19th-century Napoleon 20-franc gold coin, the most traded gold coin in France, is now worth around 340 euros for its 6.5 grams of precious metal. Over the past six months, gold has increased by 18%. Last Wednesday, on the New York precious metals futures market, the price of an ounce (31.1 grams) increased by 1.70% to reach 1,982.8 dollars, and on Monday morning, it even reached 2,009 dollars.

According to François Lenglet on RTLMatin, gold is considered a reverse barometer, increasing in value when times are tough, such as inflation, war, or banking and financial crises. Thus, the precious metal benefits from troubles in the banking sector to play its classic role as a safe haven for investors, and has crossed the $2,000 mark per ounce. It could even continue to rise if the rise in interest rates slows down this year, with some predicting it will reach $2,050. Gold is also supported by central bank purchases because it is considered a bulwark for those who want to preserve their savings, being considered safer than any other transaction instrument, particularly notes, as its price cannot be manipulated by governments, unlike traditional official currencies.

Today, investors are turning to gold.

Since the beginning of the year, the French have been buying gold because they fear that the banking crisis looming on both sides of the Atlantic will undermine confidence in the global banking system. However, the main factor fueling the surge in gold is the inflation of official currencies, such as the euro, the dollar, and others, which devalues savings. This marks the latest stage in a long appreciation of gold, which began in 1971 when the link between the dollar and gold was broken by Richard Nixon to create more dollars than there was yellow metal. Since then, the value of the dollar, as well as that of all other currencies, has ceased to stop deteriorating compared to gold, a result of the increasing use of printing presses.

Thus, in 1971, a gram of gold was worth a little over a dollar, while yesterday, it was worth almost $63, demonstrating the inflation suffered over the past half-century. For over a century, from 1803 to 1914, our currency was also linked to gold, creating 110 years of monetary stability without inflation, interrupted by the First World War, which had to be financed. The creation of money by governments, whatever the reason.

By Alexandre Laurent

Alexandre Laurentl is working in the jewelry and investment gold since 2002. Alexandre graduated from The Normandy School of Business and from the University of Perpignan a Bachelor of economics in 1995.

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