The surprising surge of gold: A new chapter for a timeless asset
In a year marked by geopolitical tensions, monetary uncertainty, and shifting investor sentiment, gold has emerged as one of the most compelling assets available. Gold has long been seen as a safe haven in uncertain times. Recently, however, it has not only survived the turmoil, but it has also thrived in it. After years of modest gains, gold has now broken through historical highs, catching the attention of institutional and retail investors alike. But what exactly is behind this rally, and can it last?
Gold’s moment: From hedge to hero
Gold has surged in the recent weeks, hitting a new all-time high of over $3,680 earlier this September. These price movements reflect more than just safe haven demand, it signals a fundamental change. Central banks around the word have started to get inflation under control, and they are signaling and end to high interest rates. For an asset like gold that yields nothing, this is critical, as it lowers the opportunity cost of holding it versus another yielding asset, boosting its appeal. The U.S. dollar has been weaking over the recent time. Historically gold which typically is priced in USD, tends to rise when the dollar is getting weaker. This is something we witness playing out in real time. Central banks in emerging markets, led by China and India, continues to add gold to their reserves as part of a broader strategy to diversify away from the dollar and hedge against geopolitical risks. Global uncertainty, driven by protracted conflicts and rising trade tensions is causing capital to flow towards perceived safety. Gold is still standing out like a safe haven and a universally recognized store of value during uncertain times.
What makes this rally different?
Gold has experienced surges in the past, notably during the financial crisis in 2008 and during the pandemic chaos in 2020, but this time is different. This rally is not driven by a single narrative. Central banks, ETFs, institutional- and retail investors are all buying at the same time, amplifying the move. Gold is also no longer just considered a hedge, its treated as a core asset for portfolios. Unlike earlier bull markets the current rally hasn’t triggered a meaningful surge in mining output. With supply remaining constrained, the increase in demand is driving the price up even further.
The road ahead
Gold’s performance so far this year is more than a reaction to short-term uncertainty. It signals a deeper structural shift in how the precious metal is viewed by both retail and institutional investors. As rates fall and fiat currencies face scrutiny, gold is no longer just a financial lifeboat – it may be becoming a permanent part of the vessel. The question is no longer whether gold can shine in times of crisis, but whether it has earned a lasting role in the portfolios of the future.
Risks
Credit risk of the issuer:
Investors in the products are exposed to the risk that the Issuer or the Guarantor may not be able to meet its obligations under the products. A total loss of the invested capital is possible. The products are not subject to any deposit protection.
Currency risk:
If the product currency differs from the currency of the underlying asset, the value of a product will also depend on the exchange rate between the respective currencies. As a result, the value of a product can fluctuate significantly.
Market risk:
The value of the products can fall significantly below the purchase price due to changes in market factors, especially if the value of the underlying asset falls. The products are not capital-protected
Product costs:
Product and possible financing costs reduce the value of the products.
Risk with leverage products:
Due to the leverage effect, there is an increased risk of loss (risk of total loss) with leverage products, e.g. Bull & Bear Certificates, Warrants and Mini Futures.
Disclaimer:
This information is neither an investment advice nor an investment or investment strategy recommendation, but advertisement. The complete information on the trading products (securities) mentioned herein, in particular the structure and risks associated with an investment, are described in the base prospectus, together with any supplements, as well as the final terms. The base prospectus and final terms constitute the solely binding sales documents for the securities and are available under the product links. It is recommended that potential investors read these documents before making any investment decision. The documents and the key information document are published on the website of the issuer, Vontobel Financial Products GmbH, Bockenheimer Landstrasse 24, 60323 Frankfurt am Main, Germany, on prospectus.vontobel.com and are available from the issuer free of charge. The approval of the prospectus should not be understood as an endorsement of the securities. The securities are products that are not simple and may be difficult to understand. This information includes or relates to figures of past performance. Past performance is not a reliable indicator of future performance.
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