Gold Extends Records As Central Banks Rush To Buy Bullion, Miners Eye Sixth Straight Winning Week

Gold’s momentum shows no signs of slowing. The bullion – as tracked by the SPDR Gold Trust SPY – continued its record-breaking run, closing at $2,860 per ounce on Wednesday, hitting the fifth straight winning session as central banks and investors pour into the metal, seeking safety amid escalating geopolitical tensions and economic uncertainty.

In a report shared Wednesday, the World Gold Council highlighted that total gold demand, including over-the-counter investment, rose 1% year-over-year in the fourth quarter, setting a new record of 4,974 tons for 2024.

Central banks have been leading the charge, purchasing over 1,000 tons of gold for the third consecutive year, with buying accelerating sharply in the fourth quarter to 333 tons.

“Central banks and investors drive market strength.Demand in value terms reached previously unseen levels,” the World Gold Council wrote.

Why Are Central Banks Rushing To Buy Gold?

The surge in central bank gold purchases signals a strategic shift in global finance, with institutions seeking to reduce reliance on the U.S. dollar amid heightened geopolitical risks.

The latest tensions between the U.S. and China, fueled by Donald Trump’s proposed 10% import tariffs and China’s retaliatory restrictions on U.S. energy imports, have only reinforced gold’s status as a hedge.

Further compounding concerns, President Trump suggested the possibility of sending U.S. forces to the Gaza Strip, adding another layer of uncertainty that has investors flocking to the yellow metal.

“We believe this gold price action reflects a significant shift in the dynamics of the gold markets over the past two years,” said Imaru Casanova, portfolio manager at VanEck. “Central banks worldwide have emerged as a major driver of gold demand and gold prices, buying record amounts of gold bullion since 2022.”

Miners Play Catch Up, Still Undervalued Despite Gold’s Rally

Despite bullion’s remarkable ascent, some of the world’s largest gold miners have underperformed significantly.

John Ciampaglia, CEO of Sprott Asset Management, said, “Some of the bellwethers, the largest gold miners in the world, struggled last year. Newmont Corp. NEM and Barrick Gold Corp. GOLD underperformed gold quite significantly. I think that isn’t very clear for a lot of investors because the reason that you invest in gold stocks is for their operating leverage.”

Yet, miners have recently started catching up. The VanEck Gold Miners ETF GDX rallied 2.2% on Wednesday, marking its highest level since late October and extending its winning streak to six weeks – the longest since July 2020. Year-to-date, gold mining stocks have outperformed all other industries, surging 18.9%.

Top-performing gold miners within the GDX ETF on Wednesday included:

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