Gold price heading towards all-time high

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In the first quarter, 1,174 tons of gold were traded worldwide. This is illustrated by new figures from the World Gold Council, the global lobbying organization for the gold industry. Compared to the same quarter of last year, this corresponds to a mini growth of only 1 percent. But the trend is clear: Gold is more in demand than ever before.

Central banks are the main drivers of demand. “We’ve never seen such a strong first quarter for central bank gold demand,” said World Gold Council analyst Louise Street.

The high mark is almost cracked

Central banks provide protection with gold in times of runaway inflation, collapsing banks, and geopolitical uncertainties. The precious metal more than lives up to its reputation as a safe haven.

This is also reflected in prices: Gold is on track to break its all-time high from the summer of 2020. It is $2,075 per troy ounce. By Thursday night, the price of gold on the London stock exchange was already drawing this mark, occasionally climbing to just under $2,063 an ounce.

The trigger for the rise in gold prices was the key interest rate decision of the US Federal Reserve. Currency watchers have raised the key interest rate again, but only cautiously and with the suggestion that rate hikes can now be stopped. The prospect of ending rising interest rates makes the precious metal more attractive than fixed-income investments such as government bonds.

It also makes it clear that the gold price will likely climb to new highs if central banks do indeed cut interest rates in the summer.

Switzerland benefits – and Putin

But not only more cautious rate hikes, fears of a global recession, the bank quake and the war in Ukraine support gold demand. So do consumers. “Demand was particularly high in China in the first quarter,” says Louise Street. “There, consumers are fully recovered from the corona lockdown for the first time in three years.”

Switzerland also benefits from the high demand for gold: it is not only an international raw material centre, but also the main hub for the processing of gold. Of the seven largest gold refineries in the world, four are located in Switzerland and three in Ticino. Together they process 40 to 70 percent of the gold traded worldwide – depending on the estimate.

Russian ruler Vladimir Putin (70) is also one of the beneficiaries of the gold boom. Russia is the third largest gold producer in the world after China and Australia. Russian gold is subject to sanctions in Switzerland and other western countries. But Putin has no problem finding other buyers, including China and India.

Source :Blick