Gold has long been regarded as a safe haven for investors and is once again drawing their attention. Andrew Chang explains why gold is on the rise, even as stock markets boom.

Wall Street

Gold has reached its highest value in history, with prices rising rapidly in a short period. This surge is attributed to investors seeking safety amid concerns about inflation, rising global debt, and economic uncertainty. Factors such as volatile stock markets, trade tensions, and a weakening U.S. dollar have contributed to gold's appeal as a secure investment.

Central banks and investors worldwide are purchasing large amounts of gold, further driving up its price. The trend reflects a shift in perception, with gold now viewed as a reliable safe haven asset, especially as traditional currencies face instability and policy shifts. Some forecasts predict that gold prices could climb even higher in the future.

Why is gold hitting record highs?

Gold is valuable, but right now it's crazy valuable, worth more today than it ever has in history. And it's made these astronomical gains in a shockingly short period of time. The value of gold arised to a record high this week. It is the biggest rally since the 1970s. At the time I record this, you can buy an ounce of gold for just over $4,100 US. An ounce, just for reference, is just a bit more than what this AA battery weighs. And we know, as far as investments go, gold is relatively safe, right? I mean, there's only so much of it to go around, unlike paper money, which we can just keep printing. So when the price of gold spikes, that tells you investors are looking for safe places to park their money. Investors are looking for an inflation hedge. They're worried about the huge debts that are being run up by major economies around the world. As a result of rising inflation, investors are going to need a safe haven, and gold is one of those possibilities. Why would they be looking for safety right now, you ask? Especially when the stock market's been shooting up? Well, because it's a little too shooty-uppy right now. The AI boom is really distorting things, and it's more of a stock driver right now than a real economic driver. I'm not saying it's a bubble, but maybe it's bubbly. And so while investors keep riding the high, they also know nothing lasts forever. Markets tumbled after China imposed export controls on rare earth minerals, and U.S. President Donald Trump responded with a 100% tariff on Chinese goods. I think an awful lot of what we're seeing is about fear right now. If you think about gold as a mirror onto the rest of the world, you could really describe it as being the sum of all fears, whether they be geopolitical or economic. So there's that. But also think about what's happening to the U.S. dollar. Donald Trump wants a weaker dollar. When we have a strong dollar, one thing happens. It sounds good. But you don't do any tourism, you can't sell tractors, you can't sell crops, you can't sell anything. But you make a hell of a lot more money with a weaker dollar. Not a weak dollar, but a weaker dollar than you do with a strong dollar. And Trump's big, beautiful bill, which experts figure will add several trillion dollars to the national debt over the next 10 or so years. More debt equals more dollars flowing in the economy equals more inflation equals a weaker dollar. And here's why that affects the price of gold. One, gold is priced in U.S. dollars. So when the value of a dollar goes down, it just takes more of them to buy an ounce of gold. But with all the uncertainty in the U.S. economy right now, trade policy forever turning on a dime, runaway deficits, the government shutdown. Yeah, you're going to have investors who think, eh, not sure where the economy is going right now. Gold looks awfully good right now. And that includes central banks around the world. As you see sovereigns around the world, as you see central banks around the world, as you see individual investors around the world go, you know what? I now view gold as a safe harbor asset in a way that the dollar used to be viewed. They've been hoovering up gold, just sucking it right up lately. Like there's no tomorrow. Globally buying billions of dollars in gold just in the last couple of months. That also raises the price. Some people are forecasting as high as $5,000 an ounce by next year. And gold is one of those funny assets where casual investors like you and me don't always think to buy it when its value is tanking. We see the price going up and our eyes light up, which keeps the good times going, reinforcing what we've known all along. That long term, the price of gold has only ever really gone in one direction.

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