Gold spot prices surged above US$2,000 per ounce for the first time in over 12 months on Monday, marking a record high of £1,645 per ounce against the pound sterling.
Gold’s safe haven properties have come to the fore amid widespread market uncertainly following Silicon Valley Bank’s collapse and Credit Suisse’s pending takeover by rival UBS.
"Like the 2008 banking crisis, the sudden loss of confidence in mainstream finance has thrown into focus the fact that bank deposits are debt, not property,” said Adrian Ash, director of research at online gold marketplace BullionVault
According to Ash, gold investors and high-value buyers are less concerned about prices than they are with the certainty of title and the fact that wholesale bullion is the most tradeable of commodities.
“It's the deep liquidity in gold, added to the security of outright ownership, which is driving this jump in new demand,” said Ash.
Source: royalmint.com
Though gold fell back to £1,620 in Monday afternoon trades, it has vastly outperformed commodities such as oil and natural gas, as well as London’s footsie blue-chip index.
In fact, the only asset keeping pace with gold right now is the so-called digital gold bitcoin, which is the world’s largest cryptocurrency by market capitalisation.
The BTC/USDT pair is currently 25% higher week on week, changing hands for US$28,200 at the time of writing.
London-listed gold companies have also outperformed the FTSE 100’s Monday trading performance, particularly Hummingbird Resources plc, having added 14% to 8.18p.
Other risers included:
- Pan African Resources PLC (AIM:PAF, OTCQX:PAFRY, JSE:PAN, OTCQX:PAFRF)- 5.5% to 15.25p
- Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF)- 4.5% to 1,840p and
- Fresnillo PLC (LSE:FRES)- 4.7% to 742p