TSX lower as gold rally takes a breather
Investing.com - Gold prices surpassed $4,000 per ounce this week, reaching levels not seen in inflation-adjusted terms since 1980, driven largely by accelerated central bank purchasing.
Central bank demand for gold is currently running at twice the pace of the 2011-2021 average, with China leading global official sector buying, according to Deutsche Bank strategists. This surge in institutional demand has helped propel the precious metal to new nominal highs with further price increases projected.
Gold’s share of central bank reserves has risen to 24% as of Q2 2025, a significant increase from its trough of approximately 9% in Q4 2015, though still well below the 74.5% peak recorded in the early 1980s. The recent milestone marks the first time gold has reclaimed its real-adjusted all-time highs from 45 years ago.
The decades-long delay in reaching these historical highs can be attributed to sustained central bank selling that began after 1979, when the International Monetary Fund prohibited members from pegging exchange rates to gold. This policy shift, coming eight years after the collapse of the Bretton Woods system, eliminated the requirement for central banks to maintain gold parity.
Bitcoin is experiencing a similar record-breaking performance this year, with Deutsche Bank analysts noting parallels between central banks’ historical approach to gold and current attitudes toward cryptocurrency. Policymakers are increasingly discussing Bitcoin as a potential—though still controversial—reserve asset for the future.
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