Gold prices breached the $5,000 per ounce mark this month, marking an unprecedented milestone in the precious metal’s history.
Speaking with The High Street Journal, Michael Akafia, President of the Ghana Chamber of Mines and Vice President for External Affairs at Gold Fields West Africa, attributed the rally primarily to geopolitical uncertainties rather than local retail demand.
“Geopolitics remains the key determiner for gold prices,” Akafia said. “Gold is a safe-haven asset, and in times of global uncertainty, people flock to it. That’s what we’re seeing now.”
Akafia noted that while analysts had forecast gold reaching $5,000 by mid-year, global events have accelerated that trajectory. “From all the indicators we’re looking at, geopolitics is the driver pushing prices higher,” he said.
The rally comes amid rising tensions across multiple fronts. Trade frictions between the United States and Canada, triggered by potential deals with China, combined with diplomatic spats between the US and Europe over Greenland, have unsettled markets.
Additionally, geopolitical volatility in the Middle East, coupled with domestic US uncertainties including potential government shutdowns, have added to investor anxiety. These factors have collectively driven investors toward gold as a safe-haven asset.
He added that while the record prices offer flexibility for miners in planning and capital deployment, they do not automatically translate into higher margins. Factors such as rising input costs, labor negotiations, and capital-intensive operations continue to affect profitability.
Looking ahead, Akafia hinted some moderation may occur later in the year. “Everything that goes up can come down,” he cautioned, pointing to potential corrections influenced by central bank activity or shifts in global politics. “But for now, the rally is sustained by ongoing geopolitical risks and market uncertainty.”
Gold’s record surge underscores its continued role as a refuge in turbulent times, reflecting investor sentiment shaped less by domestic demand and more by global instability, according to Akafia.
