The price of gold has hit new highs in the last couple of months, having doubled since 2019 as inflation continues to increase around the globe. Up until recently, the price of the precious metal was mainly influenced by the appeal and luster of the metal for jewelry.
This is still the biggest source of annual demand for gold, with citizens of India and China dominating jewelry markets globally by making up over half the trade. These markets are closely followed by the Middle Eastern and Asian markets, where the demand for higher-carat gold is higher.
With the metal going for $2,490 an ounce, miners in top gold-producing countries are raking in hefty returns. The current price represents an increase of nearly 25% so far this year, with further gains expected.
This has left some experts puzzled because traditionally gold was viewed as a safe haven for investors in times of financial turmoil. Current interest in the precious metal mainly comes from central banks, which are alarmed by the recent rise in geopolitical tensions. From Israel’s attack on Gaza to Russia’s invasion of Ukraine, war, inflation pressures and currency concerns are significantly increasing the price of physical gold.
Additionally, the prospect of endless deficits and the considerable increase in federal government debt in the United States has undermined the country’s position as the reserve currency globally, forcing other countries to seek alternative sources of foreign reserves. This has seen most nations revert to gold.
In the last two years, central banks from the Middle East, Eastern Europe and Asia have been adding record amounts to their gold reserves. In 2023, the People’s Bank of China was the biggest buyer of gold, buying 7.2 million ounces of the precious metal. This is the largest amount of gold ever bought by the east Asian country in more than four decades.
Like Russia, China paid for these purchases by letting go of its holdings in U.S. government bonds. This is worrying, because it signals an issue in relations between China and the United States. Despite this, the United States still holds more gold in reserve than any other country worldwide. Other countries that have added to their gold reserves include the Czech Republic, Kazakhstan, Libya, Qatar, Iraq, Turkey, the Philippines, Singapore, Poland and India.
Currently, Australia is the third largest producer of gold in the world, after China and Russia. In 2023, the country produced more than 293 tons of gold.
As interest in gold continues to rise, exploration companies such as Emperor Metals Inc. (CSE: AUOZ) (OTCQB: EMAUF) (FRA: 9NH) could see increasing levels of investor interest as people look to benefit from the upward trend in gold prices.
NOTE TO INVESTORS: The latest news and updates relating to Emperor Metals Inc. (CSE: AUOZ) (OTCQB: EMAUF) (FRA: 9NH) are available in the company’s newsroom at https://ibn.fm/EMAUF
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