What factors have pushed gold prices beyond 3,000 USD per ounce?

Chief Market Strategist of WGC John Reade

Speaking with a reporter Quynh Nga from the Newspaper of Industry and Trade, Chief Market Strategist John Reade of the World Gold Council (WGC), noted that gold’s recent surge past the US$3,000/ounce mark carries significant implications for the global economy.

The fast increase in gold prices reflects the confluence of several factors, including geopolitical tensions, economic uncertainties, and shifts in monetary policies. Gold prices climbed from 2,500 to 3,000 USD per ounce in just 210 days - significantly faster than previous increments - highlighting the momentum it has built over the past two years.

“In my article titled 'You Asked, We Answered: Gold Hits 3,000 USD', I provided an in-depth analysis of gold prices. The milestone of 3,000 USD per ounce marks a significant milestone and reinforces the asset’s safe-haven role in times of uncertainty,” John Reade explains.

From 1,000 USD per ounce during the financial crisis to 2,000 USD per ounce during the pandemic, gold has consistently performed well in risk-off environments while delivering returns comparable to other asset classes since 1971.

Since 2022, gold has broken its close correlation with U.S. interest rates and the U.S. dollar when central banks doubled their gold purchases and nvestment demand from emerging markets surged.

When talking about how the role of central banks has changed in recent years, John Reade said central banks have been net buyers of gold for the past 15 years. but purchases have surged over the past three years. Since 2022, over 1,000 tonnes have been bought annually, with 1,045 tonnes purchased in 2024 alone.

Gold prices climbed from 2,500 to 3,000 USD per ounce in just 210 days

Central banks have played a pivotal role in gold’s upward trajectory. Their sustained purchasing highlights its strategic importance in official reserves, particularly amid heightened geopolitical risks. This behavior not only supports gold prices but also signals confidence in its enduring value.

He added that geopolitical tensions have been a significant driver of gold’s price surge. Investors often turn to gold during periods of international uncertainty, viewing it as a stable store of value. The current geopolitical climate has amplified this trend, contributing to the metal’s record highs.

Geopolitical factors - including de-dollarization, sanctions, and inflation concerns - have been key drivers of this increase. As global fragmentation continues, central bank buying will remain a strong pillar of demand, shaping the market’s long-term dynamics.