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Investing.com -- The ongoing record rally of gold is showing no signs of slowing down, according to Nigel Green, CEO of global financial advisory and asset management giant, deVere Group. Green’s bullish prediction is based on two new catalysts: the potential revaluation of America’s gold reserves and a major policy shift in China allowing insurers to invest in bullion.
At present, the United States values its extensive gold holdings at an outdated $42 per ounce. However, there is growing speculation among leading hedge funds and financial insiders that the Treasury could revalue these reserves at market prices, which currently sit around $2,800 per ounce.
This move, if implemented, could potentially inject an estimated $800 billion into the Treasury General Account, thereby reducing reliance on bond issuance and enhancing confidence in gold as a monetary asset. Green believes that re-marking gold to its real market value could be a transformative financial event that would not only reinforce gold’s role as a core store of value but also amplify its already accelerating price surge.
In addition to this, a significant development in China is paving the way for increased demand. For the first time, Beijing has authorized a pilot program that allows insurers to invest in gold, unlocking billions in potential inflows into the market. Given China’s central bank already leads global gold acquisitions, this move is likely to intensify the existing trend of nations shifting away from US dollar assets.
Green suggests that China’s approval for insurers will supercharge demand, on top of central bank buying which is already at its highest level in decades. He further notes that these two factors alone could send gold prices soaring, especially at a time when macroeconomic conditions already favor a prolonged rally in precious metals.
Inflationary pressures continue to remain stubbornly high, worsened by tariff policies that risk driving prices even higher. The imposition of new tariffs on China and other key trading partners is not only stoking fears of a broader trade war but also fueling a run on safe-haven assets like gold.
Simultaneously, central banks worldwide are increasing their purchases of gold at a pace unseen in decades. China, in particular, has been steadily growing its reserves, with the People’s Bank of China expanding its holdings for a third consecutive month in January.
Adding to this is the geopolitical uncertainty due to the war in Ukraine, instability in the Middle East, and escalating tensions in the South China Sea, all of which are contributing to an environment of uncertainty and boosting gold’s safe-haven appeal.
With all these factors converging, the path to new all-time highs for gold appears inevitable. The combination of US gold revaluation speculation, China’s insurer-driven demand, aggressive central bank buying, inflationary pressures, and geopolitical uncertainty is creating a perfect storm for gold bulls. Green concludes by stating that the momentum currently appears unstoppable and the current record rally still has a way to run.
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