In the past year, gold has been constantly breaking records. This year started with an all-time high of $2,050, and every month it reached a new high.
The markets continued with huge interest and investment in this precious metal, which led to a constant price increase from March of this year until now. The current world stock market amounts to approx $2,520 for awhich is an increase of almost 500 dollars in just eight months of this year, and it is expected to end the year with a new record.
That the gold fever of the 21st century is definitely in effect is evidenced by the fact that in two decades the price of this precious metal has jumped by 800 percent!
According to the words Georgi Hristova from Tavex gold & silver Serbiagold has recorded long-term constant price growth for almost half a century and is treated as a “safe haven investment”.
Total world demand for gold for the second quarter of this year is 1,258 tons, which is a jump of four percent compared to last year. Moreover, Sevetski savet za zlato stated that this strongest quarter ever since they started keeping records in 2000. Also, purchases by central banks jumped by six percent compared to last year, which was also a record. So obviously we can see that it is the demand for gold is currently at an all-time high – explains Hristov. Central banks around the world see the benefit of gold as a stable reserve that is completely under their control and does not depend on foreign factors, and an increasing number of private investors are taking over this matrix. – says our interlocutor.
This is how it is treated by many investors and central banks around the world. Among other things, the National Bank of Serbia, which sees gold as a long-term shield against inflation and as a stable reserve, so it currently has a record 46.5 tons of this metal in its vaults.
China is the largest gold market in the world
As analysts say, the demand for investment gold in America and Europe is almost constant. In the US, total demand for gold has peaked in 2021 and currently stands at around 250 tonnes. The situation is similar in Western Europe. Investment gold it “shine” the most in the markets in the East – primarily China, India and Turkey. According to the data of the World Gold Council, the purchase of physical investment gold has reached a new peak in the East and their huge demand is one of the key factors pushing the price of gold up.
China is the largest gold market in the world and it is estimated that they import 1,300 tons of gold every year in the form of investment gold and gold for jewelry. Gold as an investment in China is treated as one of the safest and most responsible purchases. The demand for investment gold in the first quarter of this year jumped by 68 percent compared to last year, which is absolutely unimaginable growth in just one year. – explains Hristov and points out that apart from investors and individuals in China, an even bigger fan of gold is the National Bank of China.
From 2015 until today, China’s central bankraised its reserves from around 1,050 tons to as much as 2,264 tons and is in 6th place in the world in terms of gold reserves, but if it continues with these purchases, it could overtake the first-placed ones. American it is in first place in terms of reserves – 8,133 tons. It follows Germany in 3.352 tones, pa Italy – 2.452 tone, France 2.437 tons, Russia – 2.336 tons.
Serbia with 46.5 tons, it has a convincing weight the highest gold reserves in the Western Balkansthere are even twice as many as all other countries combined. Macedonia is second in the Western Balkans with 7 tons of gold, then Albania in 3.5 tones, Slovenia sa 3.1 still, Montenegro is 1.9 tonsBosnia and Herzegovina sa 1.5 tons i Croatia the central bank does not hold any gold in reserves. She overtook and Bulgaria which currently has 40.6 tons of gold, and we got close Finland which has 49 tons in its reserve. In addition, we are ahead of many other European countries such as Irish (12 tons), Cyprus (14 tons), Czech Republic (30 tons), Slovakia (32 tons), Luxembourg (2.2 tons) and many others.
In Serbia is the most common purchase around 200 euros. We can conclude that in other countries in the region this amount is higher and that is completely normal. A good sign is that this amount is getting bigger every year and that the number of people who decide to invest in investment gold is growing – says Hristov.
Gold preserves reserves from foreign factors
According to research of the American fund Invesco96% of central banks around the world treat gold as a safe investment. After the war in Ukraine and sanctions against RussiaCentral banks around the world saw how easily Russia was excluded from international financial flows, and how easy it was to freeze Russian reserves that were in the form of dollars, euros, foreign bonds, etc. Because of this, many central banks started buying gold and storing it in their own vaults. In this way, their reserve is secured and does not depend on any foreign actor.
Global demand is constantly growing, and every year more and more people and central banks are buying investment gold. The reason for this is that many see the changes in the monetary system and can make their own assessments about what could happen in the future on a global level. – says our interlocutor and points out that the market in Serbia is still relatively new. It is expected that the domestic market is currently growing, regardless of global events.
According to him, although the market in Serbia is developing, the demand here, as well as everywhere in the world, is growing more and more.
Many factors are responsible for this. Investment gold has a low correlation with other financial instruments such as stocks, bonds, cryptocurrencies. When, for example, the stock market, the value of shares and real estate are in decline, gold is generally not a problem. Inflation has pushed the price of gold the most in recent years. In addition, gold is universal, globally recognizable and standardized everywhere. It is not tied to one country, one market or one currency. It can be bought and sold anywhere in the world for a price close to the stock market. This gives great flexibility to investors and makes gold a very affordable investment – says Hristov and adds that an important factor that makes gold so attractive for investors is its limited supply. And that gives it additional price stability.
When it comes to forecasts, he says that inflation and geopolitical tensions affect the price of gold. Given that we live in a new era of wars and global confrontations, any such event would turn anxious investors to the safety of gold.
Photo: pixabay
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