Gold is a natural resource that cannot be produced and is in limited supply, but it is highly demanded. As a result, the price of gold is volatile and subject to sudden price increases. This occurs because of the economic concept that when there is less supply or production to meet demand, prices tend to rise. The same applies to gold. Global tensions have caused a surge in gold prices, particularly during the Russia-Ukraine and Israel-Hamas conflicts. During these times, investors tend to avoid investing in currency and instead invest in gold, stockpiling the yellow metal. As a result, investors and central banks have reserved gold.
China purchased 250 tons of gold in 2023 and now holds 2,200 tons, making it the world’s top holder of gold. Other countries that recently purchased more than 1 ton of gold include Turkey, India, Kazakhstan, Jordan, and the Czech Republic.
The piracy threat in the Red Sea region is another reason for the surge in gold prices. Pirates loot gold-carrying ships passing through the region, which has led to an increase in demand for gold.The prices of various products have been increasing, including milk, eggs, other food items, electricity, and even gold. In January, the price of gold was around 50,000 rupees, but it has since surged to 54,000 rupees for 8 grams of 22-carat gold. In the first two weeks of April, the gold rate rose to 4,360 rupees. Compared to last year, the gold rate has increased by 16%.
