While markets are hitting new highs and portfolios are up double digits this year, one asset has been staying out of the headlines, despite performing just as well. Gold futures have been reaching record highs, hitting US $2,555 per ounce last Monday. Gold, as well as silver, have emerged as the world's second-best performing assets, next to crypto. They gained about 23% year-to-date, outperforming the mega cap-loaded Nasdaq, that is up a healthy 18% itself.

Central banks have been buying gold at a record pace. According to the World Gold Council, they have purchased 290 tonnes in the first quarter, beating out the prior Q1 record from 2023. Turkey tops the buyers list this year with 30 tonnes purchased in the first quarter, followed by China who bought 27 tonnes. Other notable purchasers include India, Kazakhstan, the Czech Republic, Oman, and Singapore. The central bank buying spree has solidified gold's status as a reserve asset which has now surpassed the Euro to become the world's second largest reserve asset, behind the US dollar.

The precious metal’s performance can be attributed to its unique position as a real asset, seen as a safe haven from market swings and inflation and used by many as an uncertainty hedge. The price movements have also caught the attention of traders and has made it a prime trading vehicle, whether through gold etf’s or mining stocks which tend to be even more volatile than the underlying metal.

The rise of gold is real and since the gold market operates on vibes, if large gold inflows were to gain momentum, that current trend could signal a perfect storm of retail, institutional, and central bank gold buying. The attempts of countries around the world trying to find alternative assets to the US dollar as a reserve currency are undeniable. The US debt is a concern for many, the US dollar has been sliding and treasury auctions are becoming harder to sell. Countries are looking for hard assets instead, like gold, bitcoin, commodities…anything but fiat currencies.

But whenever an asset is on the rise, so are the headlines, posts and videos trying to pump the asset even more for all the wrong reasons. For gold, it’s generally predictions of recessions, depressions, the collapse of the financial system, countries and currencies. All these things have happened throughout history and will continue to happen, but the expressed urgency to buy gold or silver, is rather based on own agendas than on facts. For some, the agenda is simply to pump up the price to increase the value of their own positions, and for others, the agenda is to keep large groups of people interested in their theories and beliefs.

The promoted doom and gloom is nothing new. Don’t forget, social media wants you to click, comment and share, and YouTubers want to keep you on their videos. Given the economical platforms of the two frontrunners of the upcoming US election, the money printing will continue. Either plan is lacking real fiscal responsibility and the devaluation of the US dollar will continue, no matter the outcome of the election. But devaluation is the nature of any fiat currency and the US dollar will not dramatically collapse over night, as some are trying to peddle on the internet.

While the efforts to replace the US dollar as a reserve currency have increased, it’s a process that will take place over time. While it’s significance will most likely decrease, a currency that large will not just disappear, especially not considering the ties to such substantial capital markets. Doom and gloom sells, let’s not forget that promoters like Robert Kiyosaki have made fortunes from spreading pessimism, claiming for over 30 years now that the end of our financial system is here. Many followers of his and others advice, have missed out on great returns over the years.

But nevertheless, the long-term outlook for gold is good. If the trend continues, gold could reach the US $3,000 mark very soon. But as always, things can change quickly. A major geopolitical event that would see the US and other big players involved, could constrict global liquidity which would cause the US dollar to spike and certainly interrupt the rise of hard assets like gold, silver and bitcoin.

Gold and silver are great assets and can be part of a well diversified asset approach. For people with a higher risk tolerance, some of the beaten down gold miner stocks and gold mining ETF’s look very attractive in my opinion. Higher interest rates, combined with a stagnant gold price up until February of this year, have not been kind to these assets and they could present some opportunity now.

In any case, if you are planning on being involved with any of these things, do yourself a favour and seek proper financial advice.

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