Gold prices doubled over the last five years

At a recent press conference, John Reade, Chief Market Strategist of the World Gold Council for Europe and Asia, stated that the price of gold in the US has risen 100 per cent since the end of April 2019. He also pointed out that the price trend of the precious metal has been largely independent of that of the US dollar. A quite remarkable development – after all, the US dollar is the most important reserve currency and has been the world’s lead currency for many decades. It is also usually one of the most important factors influencing the gold price.

A look at the gold price development in other currencies provides clarity

The easiest way to verify Reade’s thesis is to compare the gold price performance in other currencies over the same period: in the Eurozone, the gold price has risen from 36 € per gram to 70 € within the last five years and has thus almost doubled in price. The British price of gold has increased by 80 per cent, as has the Canadian one. In China (mainland), the price of gold is up 87 per cent, in Hong Kong 78 per cent. In Australia, gold rose by almost 90 per cent and in Japan by as much as 256 per cent. In any case, the analysis of regional gold price trends suggests that the US dollar was at least not the dominant influence.

Pandemic, inflation, and geopolitical hotspots have fuelled the gold price

If the last five years can tell us anything about gold, it is that the precious metal has lived up to its traditional role as a safe haven and store of value: the global Covid pandemic from 2020 to 2022, the high inflation rates across many countries and, above all, the current hotspots of war in Europe and the Middle East have had a decisive influence on the precious metal’s performance. The recent setbacks in the price of gold are further evidence for the phenomenon, as they are attributable to the breather in the Iran/Israel conflict. Market experts point to a possible consolidation phase for gold, a common development during a price rally such as the one we have seen for the precious metal. According to Chantelle Schieven, Head Researcher at Capitalight Research, the gold price could drop to 2,150 US$ per ounce by the middle of the year, but then rise again towards 2025. Other analysts, such as those at Bank of America, expect the rally to continue, and believe that a price of 3,000 US$ per ounce is possible by the end of the year.