Global investors expect gold to hit fresh record highs within the next two years, driven largely by central banks that have grown disillusioned with fiat currencies and are buying physical metal aggressively.
Last Wednesday, gold dipped by 2% to $4,075 per ounce after markets reacted to the prospect of another Fed interest rate hike. However, fund managers regard the move as a temporary correction. The metal already pierced a record near $5,500 in January, and most analysts expect a sharp rebound toward those levels.
Official demand is setting records. Preliminary World Gold Council data shows that central banks bought 63 tonnes in September alone, the largest monthly total since November 2024. The People’s Bank of China remains the dominant buyer, lifting gold’s share of its reserves to roughly 9%, or about 2,410 tonnes.
At a Financial Times symposium, experts warned that the world is edging toward a financial crisis. According to Charlotte Youge, head of Troy Asset Management, gold has become the only reliable hedge against the US government’s massive debt burden and the likeliest restarting of the printing presses in a future recession.
Analysts at Aon Investments add a political dimension: Washington’s frequent use of the dollar as a sanctions tool has nudged many emerging economies away from holding reserves in the US currency. Instead, they are hoarding gold rather than euros or yen. Against this macroeconomic backdrop, large family offices have already begun aggressively reallocating capital out of government bonds into physical bullion.
