$3,000 per Ounce: Gold Price Reaches Magical Milestone!
On March 13, 2025, the price of gold surged to the magical threshold of $3,000 per troy ounce. It wasn't long ago that we predicted this would happen this year (2025), and sooner rather than later. This event is the result of a series of economic and geopolitical factors that have been driving up demand for this precious metal.
Historical Context: Crossing the $2,000 Threshold
Gold first broke through the $2,000 per ounce barrier in August 2020, during the COVID-19 pandemic, when investors sought safe havens from economic uncertainty. Since then, the price of gold has continued to rise, influenced by a range of factors.
Current Events: Trump Administration and Global Uncertainties
Recent days have been marked by uncertainties surrounding the Trump administration, which has imposed tariffs on trade partners like Canada and Mexico. Additionally, speculation about the actual amount of U.S. gold in Fort Knox and calls for an audit have emerged. Central banks worldwide are also continuing to buy gold to bolster their reserves. Furthermore, significant physical gold movements are occurring globally, focusing on actual delivery rather than just paper transactions.
Figure 1: Rising Gold Price (source: Craiyon)
Long-Term Issues: Debt, Inflation, and Geopolitical Conflicts
This isn't just about short-term dramatic moves. Long-term problems include unsustainable government debt worldwide, currency weakening, the weaponization of the dollar, conflicts in Ukraine and Israel, and high inflation that, contrary to official statistics, remains uncontrolled. These factors have been driving demand for gold as a safe haven.
Growth in Gold Mining Company Stocks
Despite gold reaching historic highs, stocks of companies involved in gold mining or processing had long lagged behind. Not long ago, there was a paradoxical situation where gold prices were at record highs, while these stocks were at five-year lows. This disparity was caused by several factors.
Central banks actively purchased physical gold, not stocks, which led to the rise in physical gold prices. Meanwhile, investors favored cryptocurrencies, which, by nature, are much riskier than traditional gold due to their lack of intrinsic value. This led to gold mining stocks being out of favor with investors who preferred speculative investments in cryptocurrencies with visions of quick wealth or perceived faster gains than gold. Perhaps investors or rather speculators felt that gold wasn't rising as quickly, and there was a pervasive campaign suggesting Bitcoin is digital gold, which is as nonsensical as digital food.
However, the trend has recently reversed. As gold prices reached new highs, gold mining company stocks also began to rise. Investors have started to view gold again as a safe haven and are diversifying their portfolios, leading to higher demand for stocks of companies involved in gold mining and processing.
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Based on the original Czech article: Zlato – magická hranice 3000 dolarů za unci dosažena!