Moneyfacts.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfacts.co.uk will always be from firstname.lastname@example.org. Be Scamsmart.
Gold has outperformed stocks and bonds this year as investors look for a haven.
On Thursday, gold surged above $1,900 per troy ounce as tensions between Russia and Ukraine heightened according to BullionVault, an online market for gold, silver and platinum.
This is an eight-month high in dollar terms for the precious metal which is often considered as a store of value for investors in times of uncertainty.
“Gold demand is running strong right now.,” said Adrian Ash, Director of Research at BullionVault.
On Thursday, BullionVault saw gross purchases for gold increase 163% from the prior 365-day average by weight.
This was not the only firm to see such increases, as Gold overtook the NASDAQ index as the most traded instrument on Capital.com this week.
“After a disappointing 2021, where the yellow metal lost around 3%, this year has been something of a “perfect storm” for the gold bugs,” said David Jones Chief Market Strategist at Capital.com.
“So far gold has risen by five percent in February. It is a solid performance and put the gold price back to where it was last summer,” he said.
According to the Financial Times, Goldman Sachs believes gold could top its August 2020 record of above $2,000.
Often in times of economic uncertainty, investors prefer to invest their money into gold.
As an investment, gold has historically proven that it can hold its value over time and protect people’s investment against inflation.
During times of economic uncertainty, such as the financial crisis of 2008 and during the height of the COVID-19 pandemic, the price of gold increased.
The price of gold changes according to supply and demand, and with a finite supply of the resource in the world, its scarcity will always add to its value.
So although gold cannot be created or manufactured, it is malleable. From modern medicine to technology, a variety of industries rely on it in order to function.
It is for this reason that there will always be a demand for gold, as opposed to other valuable resources such as diamonds.
Although it is reducing, 50% of gold’s demand derives from the jewellery sector according to the World Gold Council.
Central banks also form a significant part of the demand as emerging market central banks tend to rely on gold to diversify their own reserves.
To a lesser extent, gold is also used in technological innovations. While the volume of gold used in this sector may not be substantial, it still plays an important role in creating computer chips to building methods for delivering drugs into the human body.
Gold is also used in medicine, aerospace, and environmentally-friendly technology, the World Gold Council stated. For more information, read our guide on how to invest in gold.
Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. Moneyfacts.co.uk will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.