Gold demand is rising sharply as investors increasingly view it as a safe haven, especially as traditional options like the U.S. dollar and government bonds lose favor due to unpredictable U.S. policies under President Donald Trump, according to Barbara Lambrecht, commodity analyst at Commerzbank.
Lambrecht points out that the European Central Bank (ECB) has recently highlighted how the booming gold market reflects growing risk awareness in financial markets. One key advantage of gold, particularly in its physical form, is the absence of counterparty risk. Its limited and inelastic supply further preserves its intrinsic value during uncertain times.
Data from Bloomberg shows that gold holdings on the COMEX futures exchange surged by 150% from early December to early April, reaching a record 45 million ounces. The ECB also notes that investors in the eurozone have increased exposure to gold derivatives. The gross notional value of these holdings rose 58% since last November, hitting around EUR 1 trillion by the end of March. A large portion of these are over-the-counter (OTC) transactions, which carry higher counterparty default risks.
This trend underscores gold’s enduring appeal as a stable investment amidst market volatility and concerns about traditional safe havens.
