Gold rose to $2,195 an ounce in New York, a historic high that underscored its role as a safe haven. The surge is partly explained by investors’ expectations of a cut in key rates, in the context of an economic slowdown in the United States.
Increase in gold circulation
In fact, the value of the precious metal saw an increase of over 7% in one month, and about 19% in one year., highlighting a continued uptrend. Purchases by central banks and the jewelery sector, particularly in China, are also contributing to this growth, with Chinese buyers increasing their acquisitions by 24% year-on-year in January.
Central banks around the world Actively add gold to their reserves, looking to diversify their assets away from the US dollar. In January, they accumulated 39 tonnes of gold, marking the 8th consecutive month of net purchases. This accumulation reflects a broader trend toward dedollarization, particularly visible in China and Russia.
China, the world’s largest producer and consumer of gold, increased its purchases by 11% in 2023, while also reducing its holdings of US Treasury bonds. This approach highlights The growing importance of gold as a means of financial and strategic independence vis-à-vis the dollar.
A global diversification strategy away from the dollar
A less transparent aspect of the gold market is OTC trading, which is up 753% in 2023. These transactions, which can include exchanges between central banks or payments for international acquisitions such as Russia’s purchase of Iranian drones, reveal complexity. and the depth of the gold market. Although difficult to trace, these transactions are illuminating Role of gold as an alternative currency In international trade, especially between nations seeking to circumvent the dollar-dominated financial system.
The recent surge in gold prices reflects its resilience and growing appeal in a world beset by uncertainty. For both individual investors and central banks, gold represents insurance against economic volatility and a pillar for diversification of reserves. Its ability to serve as a currency in international transactions also highlights its unique role in the global economy. As geopolitical and economic tensions continue, gold should continue to shine as a guarantee of stability and independence.
