Gold Passes $5,000

Gold has been used as a store of wealth for thousands of years, and, at more than $5,000 an ounce, it is more costly than ever to secure a piece of the shiny yellow metal. Prices surged beyond $5,000 for the first time on January 25 and reached an all-time record high three days later at $5,602.22 as investors rushed to the safe-haven asset following concern about the United States’ foreign relations.

What’s So Special about Gold?

Gold is often seen as a refuge in uncertain times and a barometer of market anxiety. Since gold is traded and quoted in U.S. dollars, prices tend to increase when the dollar is weak, as gold becomes more attractive to international investors. It’s considered a safe haven because unlike many other assets, gold often moves independently of traditional financial markets. 

Gold’s price is determined by several factors, including economic conditions, geopolitical events, currency movements, central bank policies, supply and demand, investor sentiment, and technical analysis. Analysts argue that premiums could rise further as uncertainty persists. Bank of America’s chief investment officer Michael Hartnett says that gold prices could peak above $6,000. 

Beware of Scams

The figure is hard to swallow, but there’s something even worse: spending thousands and having no gold to show for it. According to APMEX:

“Like many industries, there are people who attempt to take advantage of others. If an offer sounds too good to be true, trust that it is. Someone who is attempting to sell a troy ounce of gold under spot is likely selling a fake gold coin or gold bar. The spot price represents the value of the metal, but the premium is a necessity for the entire supply chain to stay in business. The premium pays for the mines, refiners, mints, and retailers to stay in business and make a profit. Without a premium, the metal stays in the ground and no market can exist. If you see gold listed below spot price, it’s best to default to suspicion.”

For more information on gold’s spot price and the history of gold prices, visit APMEX’s website.