Gold's Bull Run Shows No Signs of Slowing Down

Gold's bull market has been ongoing for over two decades, outperforming the S&P 500 index since the turn of the century. In fact, gold has risen more than fifteenfold, while the S&P 500 is only around eight and a half times higher. This remarkable performance can be attributed to gold's scarcity, liquidity, and its ability to act as a safe-haven asset during times of economic uncertainty.

The US government's excessive borrowing has led to concerns that they will never repay their debts, which will likely result in the devaluation of the currency and reduced purchasing power. Gold, on the other hand, maintains its value over time and can even appreciate as inflation rises. Central banks have long held gold reserves to protect against inflation and meet foreign liabilities.

In recent years, central banks have increased their gold holdings by 4,500 tonnes, worth around $20 billion. This trend is expected to continue, driven in part by the diversification of reserves away from US Treasuries following the Russia-Ukraine conflict. With high demand and a growing price, gold has been able to withstand rising interest rates.