Daniel Saurenz: Gold rush among private investors

The price of a kilo of gold is unfamiliar to most investors. $105,000 or €92,000 is literally a pound. Among friends, you might be able to score points with the useless knowledge that a kilo of gold costs the same as a Bitcoin . More familiar to stock market traders is the price of a troy ounce of gold – $3,300. "That number is one thing, but the start of the rally at $1,800 in 2023 makes the rally truly impressive," says Vanyo Walter of the broker Robomarkets.

Anyone without gold in their portfolio might now think they've missed a major opportunity. The other part of the truth, however, is that "the US tech sector, as reflected in the Nasdaq, has also doubled in value since the beginning of 2023," says Stefan Riße of Acatis. The DAX has also climbed from 12,000 to 24,000 points since autumn 2022. "Gold has performed very well, but so have stocks. If fat rises, butter rises—that's a twist on an old saying," says expert Walter.

Which brings us to practical ideas. Another old saying from stock market guru André Kostolany states that opportunities on the stock market are like a streetcar. If you miss one, the next one will come along pretty quickly. By mid-year, gold had seen a 30 percent price increase. But you shouldn't chase this proverbial streetcar. The fundamental basis for gold is and remains good, but just like with strong stocks, a correction is possible at any time and would even be healthy. Analysts at Citigroup expect a decline to $2,500 to $2,700 per ounce by the second half of 2026 – which would correspond to a not untypical correction for gold of around 20 to 25 percent.

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According to Citigroup, the trigger could be a combination of declining investment demand, more favorable growth prospects, and a US Federal Reserve that is gradually taking its foot off the brake pedal on monetary policy. Önder Çiftçi, CEO of precious metals dealer Ophirum, sees things differently. He argues that "institutional investors have been shifting their investments from the greenback to other currencies and gold for months." Central banks in emerging markets, in particular – including China, Russia, India, and Turkey – are reducing their dollar reserves "and instead storing more gold in their vaults." These countries, according to Çiftçi, have fundamental doubts about whether their dollar reserves – especially in the form of US Treasury bonds – will retain their value in the long term and be freely marketable.

The precious metal will not be left completely without buyers anyway. 43 percent of the central banks surveyed plan to further increase their gold reserves - especially in emerging markets . This is significantly more than the 29 percent last year and the highest figure since the World Gold Council (WGC) and the polling company Yougov began surveys eight years ago. The fascinating question is why investors have fled to gold in the first place and how high the gold reserves actually are. "According to estimates, there are only 210,000 tons of gold worldwide and it cannot be increased at will like paper money or securities," says Thomas Soltau from Smartbroker. According to Soltau, the constant search for gold is also reflected in Smartbroker's sales and savings plans.

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"Gold is considered a tangible investment that protects against real purchasing power losses, even if a currency like the dollar or the euro were to experience massive depreciation," write the experts at Lynx Broker. This was observed, for example, in Germany during the hyperinflation of 1923. At times, one ounce of gold would have been enough to buy an entire city block.

However, it will also be important in the summer of 2025 for the gold price to anticipate events when crises are looming or beginning. "A calming of the Israel-Iran conflict, an easing of US government bond pressures, or even improvements in the Ukraine war could put a damper on gold," says Franz-Georg Wenner of Indexradar. But this would then be precisely the tram you can jump on because you missed the last one.