What China’s central bank and Costco shoppers have in common
Hint: it is not a fondness for cryptocurrencies
Gold has always held an allure. The earliest civilisations used it for jewellery; the first forms of money were forged from it. For centuries kings clamoured to get their hands on the stuff. Charlemagne conquered much of Europe after plundering vast amounts of gold from the Avars. When King Ferdinand of Spain sent explorers to the new world in 1511, he told them to “get gold, humanely if you can, but all hazards, get gold.” Ordinary men also clamoured for it after James Marshall, a labourer, found a flake of gold while constructing a saw mill in Sacramento, California, in 1848.
People are once again spending big on the precious metal. On April 9th its spot price hit a record of $2,364 an ounce, having risen by 15% since the start of March. That gold is surging makes a certain degree of sense: the metal is seen to be a hedge against calamity and economic hardship. It tends to rally when countries are at war, economies are uncertain and inflation is rampant.
Explore more
This article appeared in the Finance & economics section of the print edition under the headline "Bitten by the goldbug"
Finance & economics April 13th 2024
- The rich world faces a brutal spending crunch
- Ukrainian drone strikes are hurting Russia’s oil industry
- Would America dare to bring down a Chinese bank?
- When will Americans see those interest-rate cuts?
- China’s state is eating the private property market
- How fast is India’s economy really growing?
- What China’s central bank and Costco shoppers have in common
- What will humans do if technology solves everything?
More from Finance and economics
America is in the midst of an extraordinary startup boom
How the country revived its go-getting spirit
Could America and its allies club together to weaken the dollar?
China would not be happy
Banks, at least, are making money from a turbulent world
It is once again a good time to work on a trading desk