Editor’s Note
This article uses the changing value of Olympic gold medals to illustrate the dramatic volatility in gold prices, which recently hit a historic high.
The price of gold per gram, which had been gradually rising since 2021 and surged sharply from around June 2025, surpassed 30,000 yen per gram for the first time on January 29 this year, setting a new all-time high.
A gold medal that was worth 125,476 yen at the Paris Olympics two years ago would be worth 501,300 yen at the Milan-Cortina Olympics opening on February 6 this year (comparison based on prices on January 29, 2024 and 2026).
However, the price then reversed sharply, dropping to 26,057 yen per gram on February 2 this year.
Reported as the “trigger for the plunge” was the appointment of the next chair of the U.S. Federal Reserve (Fed), which decides on interest rate hikes and cuts. Former Fed Governor Walsh is expected to succeed Chair Powell, whose term expires in May.
Although he has not commented himself, Mr. Walsh is seen as the most cautious about rate cuts among the four “favorites” of President Trump, who is speculated to want rate cuts. Following the news of this appointment, the market seemingly judged that “U.S. dollar interest rates will rise → gold prices will fall.”
Mr. Walsh himself has not said he won’t cut rates and is one of President Trump’s “favorites.” Given this situation, why did the gold price plunge? And why did it surge in the preceding stage?
It appears there were complex factors at play.
Fundamentally, gold is held as a “safe asset” that does not lose its value during wars or political instability. Looking at gold prices over the past decade or so, they rose slightly during the UK’s Brexit referendum (2016) and the inauguration of the first Trump administration (2017).
Subsequently, a surge occurred during the pandemic. In the U.S., where the economy stalled, cash payments and monetary easing were implemented, dollars were distributed, and their value diluted. In response, central banks around the world increased their foreign exchange reserves in gold.