Gold is booming – but how safe is it for investors, really?

Gold is booming but how safe is it for investors, really? In late April it rose above $3,500 per troy ounce (a measurement for precious metals) This marked an all-time record, even allowing for inflation, exceeding the previous peak reached in January 1980 .

Fears about geopolitical uncertainty have only added to its allure.

Gold is widely perceived as a "safe haven" asset that will retain its value.

Central banks have bought more than 1,000 tonnes of gold each year since 2022 , up from an average of 481 tonnes a year between 2010 and 2021 .

Analysts say central banks may themselves have been trying to build up buffers at a time of growing economic and geopolitical uncertainty.

FOMO may be helping to drive the gold market upwards: fear of missing out.

Some experts believe the upward trend will continue, fuelled by unpredictable US policy, inflationary pressures and central bank buying.

Jon Mills , an industry expert at Morningstar , made headlines in March when he suggested the cost of an ounce of gold could drop to just $1,820 over the next few years .

Daan Stryven disagrees, saying there could be a short-term dip, but prices will continue to rise.

Russ Mould believes there will, at the very least, be a lull in the upwards trend.