Most of that is some digital system saying you are owed gold without independent audit of actual bullion reserves. More worrying: many central banks are buying actual physical gold and absorbing the extra price for moving it and custody.
What is it about gold, anyways? None of its useful properties were known until recently (and mostly overhyped and upsold tbh, at least as far as those stupid cables go). Are we really just instinctively attracted to shiny metals? Or do people like it as a status symbol?
(not to act like im above it all, i still have my gold-plated pokemon jigglypuff trading card from burger king in 1999 and i often use golden paint on model kits).
1) flight from USD assets given views that one cannot depend on US assets as safe havens
2) central banks increasing gold holdings
3) purchases by Chinese investors as they have few places to invest their money
4) concern around debt levels deficits and democratic process ability to fix this
5) concerns around central bank independence, and hence inflation targeting, being undermined for political motivations
I have personally bought a lot of gold after having been a long term US equities investor because of its risk-off and zero duration nature. In a world of stock bubbles, high valuations, and general economic uncertainty, leaning risk-off has been where I currently feel comfortable. In a world of inflation being in zero duration is a sensible place to be.
Gold, silver, stocks, real estate, Bitcoin, baseball cards, fine art, Rolexes - everything is trading at or near their all time highs. The value of the US dollar is simply going down.
Good time to remind everybody that the Fed, the US central bank, prices gold at $42.22 for some reason and nobody questions it ever. And all those dignified educated respectable board members and econ PhDs give speeches about science-based market economy, maintaining credibility and staying away from politics while caring about the wellbeing of households and families.
Question from experts: I have been itching to buy silver and hodl it for a year or two.. Maybe more..should I buy it? Will there be more consumption in coming years?
For anyone else who read this headline and thought that seemed unremarkable since gold does tend to slowly increase in value year over year meaning it’s almost always at or near its all time high - it’s up 43% over the past year.
It is about certain regimes nearing their end and folks converting assets into something fungible they can use and enjoy while exiled in Geneva, Dubai, Phnom Penh, etc.
As just one example (of many) of why its not about the USD - most global debt is dollar denominated and settled in dollars. Even if they don't reside or transact in the US, most large financial transactions settle (or are hedged) in USD. Again, just one example.
Also, understand export economies like China cannot avoid dollar settlement for goods exported to the US. They can settle in USD and covert to another asset, but only as a secondary step.
I could go on about this, but Carnegie Endowment Prof Michael Pettis explains this and more much better than I can.
The price of gold fluctuated significantly in 1979 due to concerns over whether inflation could be brought under control. It started the year at ~$250.00 per ounce and ended the year at ~$850.00 per ounce.
It was a presidential election year and consumers were getting squeezed hard by rising energy prices. Russia invaded Afghanistan, Carter suspended participation in the Olympics, and there was a general feeling of concern.
Using Wolfram Alpha to compute gold's price in 1979 relative to 2025, "850.00 1979 dollars in 2025", the result is $3,663.84
Gold closed today at $3,858.60.
Just like 1979, 2025 has a long list of international concerns making investors nervous.
I like making young bros' heads spin by explaining how little intrinsic value gold actually has.
They all start out with "if the shit comes down, gold will --" and I cut them off by saying "-- still have almost zero intrinsic value."
Can't eat it. Can't burn it. Can't really make shelter or a weapon out of it. Useful for tiny microcircuits, but that's not something the preppers will be doing in Montanam
"Well, it'll always be valuable, because people think --"
Aha, dudebro, now you're in the realm of "perceieved value." Whole different game in the end times...
Explained by weakening USD and the potential for a US/global recession is a Sword of Damocles being plucked at and played with by a mostly unwise and unhelpful regulatory environment.
20 comments
[ 2.9 ms ] story [ 36.3 ms ] threadhttps://www.theguardian.com/business/2025/sep/28/bullion-bon...
(not to act like im above it all, i still have my gold-plated pokemon jigglypuff trading card from burger king in 1999 and i often use golden paint on model kits).
1) flight from USD assets given views that one cannot depend on US assets as safe havens
2) central banks increasing gold holdings
3) purchases by Chinese investors as they have few places to invest their money
4) concern around debt levels deficits and democratic process ability to fix this
5) concerns around central bank independence, and hence inflation targeting, being undermined for political motivations
I have personally bought a lot of gold after having been a long term US equities investor because of its risk-off and zero duration nature. In a world of stock bubbles, high valuations, and general economic uncertainty, leaning risk-off has been where I currently feel comfortable. In a world of inflation being in zero duration is a sensible place to be.
The book is highly researched and explains the pattern we're in, and what we'll see next.
https://www.amazon.com/Principles-Navigating-Big-Debt-Crises...
[0] https://www.researchgate.net/figure/Global-reserve-currencie...
It is about certain regimes nearing their end and folks converting assets into something fungible they can use and enjoy while exiled in Geneva, Dubai, Phnom Penh, etc.
As just one example (of many) of why its not about the USD - most global debt is dollar denominated and settled in dollars. Even if they don't reside or transact in the US, most large financial transactions settle (or are hedged) in USD. Again, just one example.
Also, understand export economies like China cannot avoid dollar settlement for goods exported to the US. They can settle in USD and covert to another asset, but only as a secondary step.
I could go on about this, but Carnegie Endowment Prof Michael Pettis explains this and more much better than I can.
It was a presidential election year and consumers were getting squeezed hard by rising energy prices. Russia invaded Afghanistan, Carter suspended participation in the Olympics, and there was a general feeling of concern.
Using Wolfram Alpha to compute gold's price in 1979 relative to 2025, "850.00 1979 dollars in 2025", the result is $3,663.84
Gold closed today at $3,858.60.
Just like 1979, 2025 has a long list of international concerns making investors nervous.
They all start out with "if the shit comes down, gold will --" and I cut them off by saying "-- still have almost zero intrinsic value."
Can't eat it. Can't burn it. Can't really make shelter or a weapon out of it. Useful for tiny microcircuits, but that's not something the preppers will be doing in Montanam
"Well, it'll always be valuable, because people think --"
Aha, dudebro, now you're in the realm of "perceieved value." Whole different game in the end times...