Global Drivers: Economic Uncertainty, Geopolitical Tensions and Inflation
Globally, gold’s rise can be attributed to a combination of factors. Economic slowdowns, geopolitical tensions, and fears of sustained inflation have caused investors to flock to the precious metal as a safe-haven asset. According to a recent survey by the German ifo Institute and Swiss Economic Policy Institute, global inflation is expected to remain high until at least 2028, further enhancing gold’s appeal. Adding to this is the trend of central banks increasing their gold reserves, further underpinning demand and contributing to higher prices.UK-Specific Factors Behind Gold’s Surge
The record-breaking performance of gold in GBP terms is also closely tied to the challenges faced by the UK economy:- Sterling Weakness
- Inflation and Interest Rates
- Economic Uncertainty
- Strong Retail Demand
Golden Insights
Paul Williams, Managing Director at Solomon Global, commented on the historic milestone:“Gold’s record-breaking performance in GBP reflects local and global economic conditions. Gold shone on the global stage throughout 2024, and the factors that led to its stellar performance don’t look to be abating in 2025. As the UK navigates economic challenges, many are turning to the asset as a stable and reliable investment. This trend underscores gold’s enduring appeal as a hedge against uncertainty and a means to safeguard wealth.”
