In other currencies, the gold price had already hit records in the previous weeks and days. Its new Swiss franc record is also a reflection of a slight weakening of Switzerland's currency.

Gold’s remarkable performance mirrors a broader global trend. The precious metal’s 44 percent annual appreciation in Swiss francs in 2024 highlights its role as a safe haven asset, a feature it traditionally shares with the Swiss franc. According to Christian Brenner, CEO of Philoro in Switzerland, this uptick is driven by several key factors.

«The possibility of new U.S. import tariffs under President Donald Trump, coupled with fears of rising inflation and escalating debt levels in the United States, has fueled demand for gold,» Brenner explained in a press release. Additionally, record-breaking gold purchases by central banks and the geopolitical instability have contributed to the upward momentum.

Shift Away From the Dollar?

Insights from Hong Kong based J. Rotbart & Co. align with these observations. As highlighted in their analysis, central banks globally have been diversifying reserves in response to geopolitical tensions and declining confidence in fiat currencies. Countries such as China and India have significantly bolstered their gold holdings, reflecting a shift away from reliance on the U.S. dollar.

Moreover, the persistence of inflation despite aggressive monetary tightening by major central banks has underlined gold’s appeal as a hedge against currency devaluation. «Gold’s resilience during times of economic stagnation and its inverse relationship with currency weakness continue to attract institutional and individual investors alike,» noted the report.

«Gold Interest Rate» Also Increasing

An intriguing aspect of the current gold market is the rise of gold lending rates, or the «gold interest rate,» which recently climbed to 3.5 percent in London—the highest level in over two decades. As highlighted by the «Handelsblatt» (article in German), this phenomenon stems from increased demand for physical gold in the U.S., driven by fears of potential tariffs: Manufacturers and jewelers are borrowing gold to hedge against price volatility, according to Wolfgang Wrzesniok-Rossbach of Fragold.

Although unusual, these elevated rates illustrate the unique dynamics of the precious metals market in the current economic environment.