On Friday, March 14, 2025, the price of gold increased further and for the first time burst through the psychological barrier of $3,000 per ounce, or 31.1 grams. The price of this commodity has already increased by over 13% since the start of the year. Many people worry about their finances during uncertain times when the future looks dismal. Investors frequently have the same reflex: they search for investments that can withstand a crisis. In addition to being safe during currency reforms and impervious to changes in exchange rates, gold maintains its worth regardless of how high inflation gets.
Here are the main reasons why gold has recently broken records
The London Bullion Market Association, which has been determining the global market price for this commodity trade since 1919, has its headquarters in London, making it the most significant market location for the spot gold market. The United States, China, India, and the Middle East are other, considerably less significant trading hubs. As we look for the reasons for the recent surge in the price of precious metals, we are looking specifically at the United States. Commodities expert Frank Schallenberger of Landesbank Baden-Württemberg (LBBW), like many other experts, is unambiguous about the primary blame.
In an interview with DW, Frank Schallenberger claims that the present U.S. tariff policy is the primary cause of the increase in gold prices. Uncertainty in the financial markets leads to a renewed demand for gold as a “safe haven.” Additionally, Carsten Fritsch, a commodities analyst at Commerzbank, agrees, adding his initial and last name. The key cause for the dramatic surge in prices, he claims, is the uncertainty surrounding US President Donald Trump’s trade policies. He further explains to DW that the current price increase has not been significantly influenced by typical factors, such as interest rate expectations and the movement of the US currency.
Unserious speculation also contributes to fears of a global crisis. For instance, the forecasts of American entrepreneur and best-selling author Robert Kiyosaki are currently making the rounds on several websites. In 2025, his 10-year-old prediction predicts a significant economic disaster. He advises concentrating on self-sufficiency, starting your own business, and, most importantly, buying gold, silver, and Bitcoin. However, analysts at Goldman Sachs blame central banks. Interest rates are the main factor influencing this commodity trade. Investing in precious metals is especially rewarding when they are cheap. Additional legal oddities include the German tax system, which exempts investments in tangible assets from taxes after a year.
Central banks are on the hunt for gold
Gold has numerous stakeholders, including national economies, institutional investors who wish to invest in precious metals since they are no longer able to earn substantial returns, and individuals who wish to secure their assets. Fritsch, an economist at Commerzbank, speculated that central banks might have bolstered price increases by buying large quantities of this commodity. Central banks frequently purchase gold because they are worried about the possibility of financial sanctions. There are worries about getting caught up in disputes between nations with more developed economies or suffering primarily from interruptions in international trade.
Goldman Sachs Research claims that sanctions imposed after Russia’s invasion of Ukraine have led to a sharp rise in purchases in these nations. Lastly, the immediate future appears cautiously positive, according to the World Gold Council (WGC), a lobbying organization for this commodity mining sector. According to Louise Street, a specialist at WGC, we anticipate that central banks will continue to set the tone in 2025 and that more investors will put money into gold exchange-traded funds, Manager Magazin reported. However, as consumer purchasing power is diminished by high prices and slow economic growth, jewelry decline is expected to continue.
