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“The key advantage of Gold is that it is not the responsibility of anyone else,” said Nikos Kavalis, Managing Director of Metals Focus.
Sven Hoppe | Photo alliance | Getty images
Singapore – Gold claimed the Crown Safe Haven. With cash prices increasing so far in 2025, Bullion gains exceed that of other traditional paradise such as the Japanese Yen, the Swiss franc and the US treasures – forcing investors to rethink what real safety in the face of the concerns of budgetary sustainability and imminent wars.
At the heart of the attraction of Gold, he told CNBC on Monday the Gold’s attraction market.
“The key advantage of Gold is that it is not the responsibility of anyone else,” said Nikos Kavalis, Managing Director of Metals Focus. “When an investor has treasure, other sovereign obligations and even currencies, he finally bought in the respective economy,” he said.
To take stock of the performance of other typical shelters since the start of the year: the dollar index, which measures the value of the greenback against a basket of currencies, has weakened almost 10% of the year to date. Refuge coins such as the Japanese Yen and the Swiss franc have strengthened around 8% and 10% compared to the dollar, respectively, in the same period.
The yields on the deposit of the American government of 10 years of reference are approximately 19 points of base lower than the year to date. Yields and prices change inversely on the bond market, which means a drop in equal yields at higher prices.
Gold price of the year at an appointment
On the other hand, the prices of gold have constantly won over the fresh summits for months. SPOT GOLD has gained around 30% during the year to date, currently negotiating at $ 3,403.09 after reaching a summit of $ 3,500 in April. Gold’s demand was propelled by an atmosphere of instability and uncertainty, in particular with recent developments in the Middle East, in addition to demanding demand for us and shelters.
“There is a growing feeling of not being sure of what the future of the US dollar and the US Treasury market will be. And I think that has fueled much more interest in alternative shelters like gold,” said the world’s central banks of the World Council, Shaokai Fan.
Although the American dollar and treasurys have historically served as a bastion of financial security, cracks began to show.
American Treasurys was faced with a Steep sale in April After the deployment of President Donald Trump’s “reciprocal” rates. A later outing of American debt for a long time in May After Moody’s downside on the United States and Trump tax bill was another long-standing reputation for Treasurys as a safe refuge, investors’ concerns concerning the budgetary discipline increased, the 30-year-old American yields exceeding 5%.
The request for American debt instruments has since recovered. However, confidence in American assets has been compromised by the development of volatile policies in the largest economy in the world.
Why gold stands out
“Gold as an actor is not affected by high debt / GDP ratios that have an impact on other currencies,” said the global manager of institutional markets of the ABC refinery, Nicholas Tractll, who added that the budgetary position adopted by the United States and the others remain relaxed despite the alarm ringtones found by fixed income markets Check.
American bonds and the dollar were not the only ones whose reputation for refuge was bumpy. The rout of the Treasury in May was also accompanied by a sale of other key markets, investors bailing off Japanese government bonds.
“Japan also has structural problems in progress,” said the World Gold Council fan. He explained that the Japanese yen was in part because of interest rate differentials.
Yields on the Japanese government’s obligation to 10 years have increased by 39 base points since the beginning of 2025, indicating a drop in demand. The Japanese yen appreciated about 8% compared to the dollar in the same period.
Why is gold standing among the others, is that it is a large liquid market for one and also, it is apolitical.
Shaokai fan
Global Gold Council
As the Bank of Japan has not increased rates as much as other central banks, it was “dissuasive” for investors to move into the yen because of the interest rate differential, Fan said.
Japan Central Bank has kept its 0.5% stable policy rate For the second consecutive meeting in May, the concerns about Trump’s prices have darkened the country’s economic prospects. He also held the Reference rate at 0.5% at its June meeting Tuesday Faced with increased growth risks.
The Swiss Franc, another traditional currency in Houmle, has strengthened more than 10% against the greenback since the start of the year.
However, the Swiss National Bank can try to discourage refuge flowsWhat makes the Swiss franc less competitive, said Fan.
Back in March, the Swiss National Bank Set its 0.25% policy interest rate. Swiss consumer prices have dropped in May for the first time in more than four years, which has given rise to certain negative interest rate forecasts in the next political meeting.
“The Swiss franc is still very sexy, but the problem is [if] The Swiss now have negative rates, and if I buy a franc, I do not get much returns, “said Bart Melek, head of the goods strategy at TD Securities.
In this vein, gold stands out from other security assets that are issued by and linked to the government owners, owners of the industry told CNBC.
“Why is gold standing among the others, is that it is a large liquid market for one and also, it is apolitical,” said Fan. “All the other assets are issued by government owners. It is therefore not a fiduciary currency. Gold supply is limited by natural limitations, and I think that is what brings it out as a safe refuge asset. It is not linked to a specific political risk,” said Fan.
And unlike sovereign obligations or fiduciary currencies, gold has no counterpart risk, said Melek. “Gold has intrinsic value.
In -depth gold purchases of the world’s central banks also increase its refuge call, added Melek. In 2024, central banks added a net 1,044.6 tonnes of gold to their reserves, marking the Third consecutive year that purchases exceeded the bar of 1,000 tonnes.
The European Central Bank also recently reported that gold has exceeded the euro to become the second greatest reserve, representing around 20% of world reserves at the end of 2024.
