The last few years have marked significant uncertainties for the global economy. When we compile a list of risks, factors such as political developments, geopolitical tensions, the potential impact of US-China uncertainty, the rise in global debt, energy security, and the impact of climate change on various macroeconomic indicators such as food inflation are at the top of the list. While this list has dominated the economic agenda in recent years, we cannot say that a more moderate outlook awaits us for the rest of the year, barring a few geopolitical improvements.
As is well known, gold is a safe haven for every investor in this chaotic environment. In financial history, during the Gold Standard era, which preceded the World Wars, and the Bretton Woods era immediately following, gold was always considered the most prestigious asset, and world trade was guided by this element of trust. An examination of the past two decades of gold's growth reveals two significant upswings. One, of course, is the 2008 global crisis and the period that followed in the few years that followed. The global panic that began with the collapse of Lehman Brothers eroded confidence in banks and the fiat currency system. Monetary expansion and the decline in interest rates to zero levels led to a historic rally in gold prices during this period. The price rose from an average of $720/ounce in October 2008 to $1,920/ounce in September 2011, a gain of approximately 166%.
There was limited volatility in gold prices between 2011 and 2020. While events during this period included Fed interest rate hike signals, Brexit, and the Trump 1.0 era, the simple arithmetic average of these 9-10 years pointed to $1,400/ounce. The shock wave created by the pandemic in 2020 led to record-breaking monetary expansion, which laid the groundwork for rapidly rising inflation and debt in the following years. In 2022, the Russia-Ukraine war, energy and supply chain shocks, Trump 2.0 policies, and tariffs, along with: The price, which stood at $2,480/ounce at the beginning of 2024, even surpassed $4,300/ounce earlier this week. Undoubtedly, demand for gold in Central Bank reserves was a catalyst for this momentum. According to World Gold Council reports, Central Banks purchased 255 tons of gold in 2020, rising to 450 tons in 2021. 2022 marked a turning point in gold demand. Central Banks invested 1,136 tons of gold. This figure rose to 1,037 tons and 1,045 tons in 2023 and 2024. As of August 2025, data for this year indicated that Central Banks purchased approximately 444 tons of gold. We don't yet know the year-end figures. While purchasing will likely be more limited than in previous years, gold is still experiencing a period of net buying.
Gold prices have been pointing to a situation that hasn't been explained by various indicators for some time. For example, despite moderate news on geopolitical risks, gold prices continue to rise. Global reports predict gold at $5,000 per ounce by 2026. The US government is closed, the Trump-Fed tensions are well-known, and he has revived the tariffs by announcing tariffs on China. Bloomberg Economics estimates that the global economy will suffer a $1.4 trillion decline by the end of 2027 due to tariffs. The Institute of International Finance announced that global debt reached $337 trillion by the second quarter of 2025. Confidence in the traditional monetary system has waned. Gold has moved beyond being a safe haven and has become a sacred asset in the face of potential collapse scenarios. The rise in gold is quite valuable for the reserves of central banks. How many times has there been a period where an asset bubble was highlighted for gold investors?
