Why is the price of gold skyrocketing?

DW (English)

Crises, wars, uncertainty — when investors are looking for a safe investment in times like these, they buy gold. Bullion has just reached an all-time high, and there seems to be no end in sight to the rally.

Transcript

00:01Gold has never been so expensive.

00:04America's budget crisis and the government shutdown has sent investors on a gold rush.

00:10Many big economies are under pressure to slash interest rates.

00:14The feat that could stoke inflation, combined with a heavy debt load,

00:18is also pushing people towards safer investments.

00:22The yen slide is another factor.

00:24The woman, expected to be Japan's next prime minister, Sanei Takaichi,

00:29is promising more government spending and loose monetary policy.

00:33With the yen losing its role as a safe currency, gold looks even more appealing.

00:40After weeks of steady gains, gold prices have jumped again in recent days.

00:46On Monday, the price briefly broke above $4,000 an ounce for the first time.

00:52Since January, it is up around 50 percent.

00:57And analysts are betting on more to come.

01:00Goldman Sachs edging near $5,000 by the end of next year.

01:07We still have very high levels of debt,

01:10and central banks are no longer taking the fight against inflation quite as seriously,

01:15because they need to keep government debt affordable.

01:18That means inflation eats up the interest on loans, leaving nothing of your money in the end.

01:25So the last truly safe haven in this world, apart from stocks, is gold.

01:31Central banks are still buying to shore up their currencies,

01:35especially in emerging markets, where demand for gold remains strong.

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