There's a gold rush on as investors around the globe prepare for war, a report claimed Tuesday.
The trend of hoarding bullion began a decade ago but accelerated this year as central banks — especially those that could be socked with U.S. sanctions under Donald Trump — stocked up on gold, which closed above $2,800 an ounce last week for the first time ever and could hit $3,000 by the end of next year, reported Politico.
“It’s a sign of impending wars,” said one European central banker.
Gold is up 35 percent this year, well above the 20 percent growth in U.S. stocks and more than double of any European stock index, and buying has been dominated by Hungary and Poland highly sensitized to geopolitical risk.
“Amid increasing uncertainty," said the National Bank of Hungary in a statement, "the role of gold as a safe-haven asset and a store of value is of particular importance, as it enhances confidence in the country and supports financial stability.”
Investors have been attracted to gold to counter the failing reliability of the U.S. and Europe, which built the postwar global financial order, and analysts say many central banks are increasingly concerned about their exposure to risk in the U.S. as Trump threatens to enact tariffs and possibly start trade wars.
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“In times of crisis people flock to gold,” said Krishan Gopaul, senior analyst at the World Gold Council. “It’s a global asset that people value, and they know it will be accepted by others.”
Gold's value has historically increased in value in parallel with doubts about other assets — such as the dollar.
“Gold has been a symbol of trust for 3,000 years,” said historian Salvatore Rossi, former deputy governor of the Bank of Italy. “Gold bars for central banks are like grandpa’s old gold watch for a family: it’s the last resource, the one you would not sell, but everyone knows that you have it.”