Market Developments and Record Prices
The gold price experienced an unprecedented surge in 2025. Within a year, it rose by about 44% to over $3,400 per ounce, with increases to around $3,500 in the following weeks. This development is no coincidence but the result of multiple crisis points:
- Inflation: Inflation remains high and erodes the purchasing power of many citizens.
- Geopolitical Tensions: Conflicts drive investors into safe havens like gold.
- De-dollarization: Countries like China and Russia are diversifying their reserves away from the US dollar to gold.
The Role of the Paper Gold Market
There is a growing discrepancy between trading in paper gold and the actually available physical stocks. Derivatives are traded, but in a serious case, significant supply shortages could occur, making physical gold especially valuable.
“Gold is not the problem – gold is the solution.”
Warnings from the European Central Bank (ECB)
The ECB warns of a potential domino effect in the financial market due to the exploding gold price. Its concerns particularly regard:
- Delivery Failures in Futures Contracts: These could put banks in distress.
- Systemic Risks: A collapse of the paper gold market could shake the financial system.
- Bankruptcies: In the worst case, a financial disaster looms.
Drivers of the Current Price Increase
Several factors are driving the rise:
- Risk Aversion: In uncertain times, investors seek safety in gold.
- Political Uncertainties: Trump’s unpredictable politics increases market volatility.
- Loss of Confidence in Paper Currencies: Investors are losing faith in traditional currencies.
Importance for Private Investors
Consequences for private investors:
- Physical vs. Paper Gold: Physical gold is considered safer.
- Diversification: Central banks are diversifying in favor of physical gold.
- Risk Assessment: Over-leveraged derivatives carry high risks.