For the first time in history, a 400-ounce gold bar is worth US$1 million, as the price of gold surpassed US$2,500 per ounce. This milestone reflects a 22% increase in the price of gold so far this year, setting several records.
The increase in the price of gold is not so much due to its rise in price, but rather to the depreciation of the dollar. The Federal Reserve has adopted a looser monetary policy, which has led to higher inflation and a depreciating dollar. This has prompted many central banks to accumulate gold to protect against the erosion of purchasing power.
In the first six months of the year, central banks added 483 net tons of gold to their reserves, up 5% from the record first half of 2023. The dollar share of global reserves has fallen by 14% since the turn of the century, and this trend of de-dollarization is likely to continue, further boosting the gold price going forward.
Mike Maharrey. "For the first time in history, $1 million gold bullion!" Money Metals.