“Gold is a barometer of anxiety”

Adrian Ash

“Gold is a barometer of anxiety,” said Adrian Ash, director of research at BullionVault, the world-leading physical gold, silver, platinum and palladium market for private investors online.

Adrian Ash has been quoted saying this in Washington Post's article titled "Gold keeps setting records as uncertainty buffets other assets" of today.

The main points discussed in the article are as under:

The surge in gold prices is tied to a mix of economic uncertainty and geopolitical instability. Adjusted for inflation, gold has reached its highest value since 1980, exceeding $3,200 per ounce. Factors driving this include geopolitical tensions such as the Ukraine war, economic disruptions triggered by the Trump administration's tariff plans, sanctions on Russia, and a growing global effort to diversify away from the U.S. dollar.

Gold has historically been a refuge for investors during times of financial instability. Central banks have been accumulating gold to reduce reliance on the U.S. dollar, especially in regions like Asia and the Middle East. Retail investors, influenced by headlines and economic fears, have shown heightened interest in gold, whether through exchange-traded funds (ETFs), small gold bars, or coins. Younger investors are increasingly drawn to this commodity, as firms such as Monetary Metals and Money Metals Exchange report record transactions and the opening of new accounts.

While ETFs have made gold investments more accessible by eliminating the need for physical storage, many investors prefer holding physical gold due to concerns about financial institution reliability. Costco has even started selling gold bars, suggesting gold is gaining appeal among mainstream consumers. For many, physical gold represents security in a volatile world—fewer fees, fewer middlemen, and a tangible asset they can hold.

The popularity of gold is also tied to its historical performance during periods of low interest rates or poor stock market conditions. However, skeptics argue that gold offers no dividends or yields, which might limit its attractiveness as an investment. They foresee potential corrections in gold prices if economic conditions stabilize, particularly for its industrial and jewelry applications. Despite this, proponents like Treasury Secretary Scott Bessent hail gold as a reliable and accessible investment.

Notably, the shift toward gold investments has been amplified by a series of major events, including the coronavirus pandemic, the Ukraine war, and the 2023 regional bank crisis. These occurrences fueled anxiety among investors, leading to spikes in gold transactions. Retail demand for gold bars and coins has been robust, with firms reporting increased interest from buyers across demographics.

In summary, gold's rise reflects its enduring appeal as a safe-haven asset during times of crisis. Its growing accessibility through platforms like ETFs and retailers such as Costco highlights its relevance in both institutional and individual portfolios. Although its price trajectory may face headwinds in the future, gold remains a symbol of stability amid uncertainty.

Read full article here.