The price of gold has reached a historic milestone, surpassing $3,000 per ounce (approximately 33,400 NOK) and setting a new all-time record. After crossing the $2,500 (27,800 NOK) threshold last summer, gold continues its impressive upward trajectory, fueled by escalating trade wars and growing geopolitical tensions.
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Since the beginning of the year, the price of gold has surged by 13%, following a 27.5% increase in 2024 and a 13.5% rise in 2023. Meanwhile, key U.S. stock market indices, such as the DOW JONES and NASDAQ Composite, have declined by 3% and 8.9%, respectively.
According to analysts, gold is benefiting from its status as a safe-haven asset during times of crisis. A 400-ounce (12.4 kg) gold bar, commonly used by central banks, is now valued at a staggering $1,200,000 (13.36 million NOK)—an extraordinary increase from its 1999 valuation of just $110,000 (1.22 million NOK), as noted by Ole S. Hansen, Head of Commodity Strategy at SAXO BANK.
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Several factors are driving this surge. One key reason is the recent monetary easing by the U.S. Federal Reserve, which has lowered interest rates from 5–5.25% to the current 4.25–4.5%. This has reduced gold’s opportunity cost relative to bonds.
Another contributing factor is the intensifying trade war, led by Donald Trump, who recently threatened the European Union with high tariffs on alcoholic beverages, sparking further inflation concerns on both sides of the Atlantic.
Geopolitical crises, including conflicts in the Middle East and the ongoing war in Ukraine, also play a significant role in driving up gold prices. Political instability and uncertainty have historically prompted investors to allocate capital toward safe-haven assets.
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Central banks have also significantly increased their gold purchases. Since the onset of the Ukraine conflict, annual purchases have doubled from approximately 500 tons to over 1,000 tons. China, wary of potential U.S. sanctions, has emerged as one of the largest buyers.
As gold prices continue to climb, the question arises: Is gold overvalued?
"It looks like the metal is currently in a bullish phase," said Lukasz Jakubow, Managing Director of SJØLYST INVESTORS AS — Family Wealth Management Company in Oslo, who predicts that prices could reach $3,300 (36,800 NOK) by year-end. Bank of America has even outlined a scenario where gold could hit $3,500 (39,000 NOK) per ounce.
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"As a result, investment demand is expected to rise by 10%", noted analysts at the U.S. bank in mid-February. While these projections may seem ambitious, they are not unrealistic. "The fundamental factors supporting gold remain intact: it continues to serve as an alternative currency amid persistent concerns over insolvency and mounting inflation fears, exacerbated by the relentless trade war initiated by Donald Trump."
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