Editor’s Note
This article examines the recent surge in gold prices, which have surpassed $4,600 per troy ounce, marking a significant increase of over 70% from the previous year. It explores the multifaceted drivers behind this rally, from central bank policies to geopolitical tensions, offering insight into what sustains gold’s value in turbulent times.
After the turbulence at the beginning of the year, the price of gold is on the rise again. It recently surpassed the $4,600 per troy ounce mark (a unit of mass specific to precious metals and gemstones, exactly equal to 31.1034768 grams). The price of a troy ounce in dollars has increased by over 70% since last year.
On one hand, this precious metal is sought after as a safe-haven asset due to persistent geopolitical uncertainties and rapidly growing global debt. Furthermore, it benefits from the weakness of the US dollar and lower interest rates.
Christian Brenner, CEO of precious metals dealer Philoro Switzerland, adds that crisis hotspots in Iran and Venezuela, disputes concerning Greenland, and Trump’s attack on Fed Chair Jerome Powell also influence the price.
Elias Hafner, an economist at Zürcher Kantonalbank (ZKB), believes that central banks in emerging countries will remain the main driver of gold purchases next year.
With interest rate cuts, purchases of bonds by the US Federal Reserve (Fed), and a weaker dollar, ZKB expects a new increase in investments. The rise in public debt also argues in favor of gold as a strong currency.
What does this mean for the gold jewelry you have at home?
He emphasizes, however, that buying and selling chains, bracelets, or other rings incurs costs and one should expect a significant discount on the gold price when selling.
Christian Brenner of Philoro Switzerland indicates that the proportion of those selling precious metals has increased significantly. Benjamin Summa of gold dealer Pro Aurum confirms:
He adds, however, that about 80% of customers are buying gold, while about 20% are selling it. Given the positive market outlook, both economists and both dealers emphasize that it could also be wise to hold onto one’s gold.
Those who want to sell must be cautious. With the rise in the gold price and the increased interest in selling that follows, scammers are also more numerous. Philoro Switzerland and Pro Aurum offer advice for protection:
– The buyer must have a physical store or, at a minimum, an official purchase authorization from the Central Office for Precious Metals Control.
– It is important to compare the purchase prices of different providers. The purchase price should be transparently based on the day’s precious metals price.
– Serious dealers appraise precious metals either directly in front of their customers or by clearly explaining why a more in-depth analysis – for example in a laboratory – is necessary.
– Jewelry should be accurately analyzed by X-ray fluorescence spectrometry, and all precious metals they contain – that is, gold, silver, platinum, and palladium – should be compensated for.
– Warning signs are mainly lack of transparency and time pressure. Unusually high “call prices,” well above the market, also often prove unrealistic in practice and are subsequently revised downward.
Those who, instead of selling, prefer to jump on the bandwagon and invest in gold have several options. One solution is to buy physical gold. To remain flexible when reselling, bars of different sizes are ideal. Anything exceeding a value of 20,000 Swiss francs should be placed in a bank safe, a deposit, or a customs warehouse.