Because gold splashes

Why these records? Gold now seems to proceed independently from the trend in interest rates and the dollar. There are many competing reasons, cited in no particular order by the various media: the ongoing wars, the uncertainties about the Chinese economy, the conspicuous purchases of the central banks, the tensions on international trade with cross duties, the rise of the stock indices Americans. These factors certainly have an impact, but they do not fully explain the practically constant increase over the last 12 months (over 40%). In the graph, the central banks' gold purchases and below the trend of the Dollar index:

And in fact, there is something else behind this race: there is a substantial change in the reference model. The dollar empire is in crisis, faced with the rise of alternative models, such as the Chinese one. The crisis also comes from the relative ease with which Russia has managed to avoid the obstacles with which the G7 has disseminated the world, including price caps on oil, sanctions, seizures of assets, etc. Russia has managed to create a parallel semi-underground economy, made up of ghost fleets and alternative currency and payment systems. India, in turn, increasingly represents a further alternative, and other more or less large economic realities are gathering around these three large countries, which in fact do not necessarily recognize the reference to the American gold-dollar-Fed system. In other words, the gold rush is a reflection of the fragmentation of the world we have known so far. It is not simply a question of the existence of Brics. These are a manifestation of the fragmentation, not the cause. The system is crumbling because globalization has effectively become ungovernable. The WTO is an empty box, whose rules are used or forgotten according to convenience. The United States (rightly or wrongly, it doesn't matter) has been blocking the appointment of new members of the WTO Dispute Appeals Body for years, effectively delegitimizing the body itself. The temporary system set up by the EU and a group of countries does not work and in any case expires this year. As of January 1, 2025, there are effectively no rules that are truly applicable in international trade, at least not those of the WTO. Contracts are valid and above all balances of power and alliances are valid, it is worth having logistics, it is worth having military control, it is worth controlling payment systems.

As a result, the pressures towards fragmentation are multiplying, and in this jagged and, under the surface, conflictual panorama, gold becomes a free port that everyone still recognises. A return to the solidity of the precious metal which serves as a reference for all markets. The strength of gold derives from the weakness of the globalized system of finance, trade and geopolitics.