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Darling All,
Disclaimer: Please note this is not investment advice.
But you will need a large cup of caffeine!
Baroque Rocks has not written a “Knowledge” piece for a while, but on Monday 10th February 2025, Gold hit a historic milestone, for the first time surpassing $2,900 USD per ounce — an all-time high! For magpies and goldbugs alike, the pressing question was: why is gold surging, and will the price continue to rise? Baroque Rocks believed the answer back in February to affirmative and was duly vindicated when Gold soared to $3,500 USD on Tuesday 22nd April 2025! As geopolitical tensions escalate and the global monetary order shifts, gold's allure has never shone brighter. Below, we explore the major forces driving this new golden era — from central bank stockpiling to rising market momentum and strategic power plays. Firstly, though we canter through gold’s historic role and its transition from the Gold Standard to today’s Fiat system. And finally, for those keen to get their bejewelled mitts on some, a guide to where to buy “gold glorious gold!”
The Modern Gold Timeline
Understanding today’s gold market requires a look back at its evolution. Below is a timeline of major shifts in Gold’s role in the financial system.
- Pre-1971: Gold was an integral part of the global monetary system under the Gold Standard, ensuring a fixed value for currencies.
- 1971 The Fiat Era Begins: The U.S. abandoned the Gold Standard, ushering in a new era of fiat money, untethered from gold.
- 1980s - 1990s - The Hard Money Era and Gold Sell-Offs: Confidence in Fiat currency led Western central banks to sell off large gold reserves, most notably the UK’s infamous 1999 “Brown’s Bottom” sale at $255 per ounce.
- 2000s - The Rise of Debt and Zero Interest Rates: Increasing private and public sector debt fuelled by low interest rates and rising asset values cracks the financial systems and results in the global financial crises. Super low interest rates and Quantitative Easing come to the rescue but raise doubts over the future of the financial system. Meanwhile, countries like China and Saudi Arabia quietly increased their gold reserves. Gold broke $1,000 per ounce in 2009.
- 2020 - The COVID-19 Wake-Up Call: Economic uncertainty led to record-breaking central bank gold purchases. Gold surpassed $2,000 per ounce for the first time.
- 2022 - Russia-Ukraine War: Geopolitical instability accelerated demand for gold as nations sought alternatives to dollar-based reserves.
- Early 2025 - The Gold Revaluation Debate: In February 2025 Gold spiked to $2,900 per ounce, and speculation that U.S. gold revaluation is intensifying, potentially reshaping global monetary policy.
- April 2025 - Gold soars to $3,500, with rumours swirling of a new "partial gold standard" system gaining traction in emerging markets.
 The Gold Standard vs. Fiat Currencies
The Gold Standard was a monetary system in which a nation’s currency was directly tied to Gold’s value. In contrast, the Fiat system, used today, relies on government-issued money that has no intrinsic value, deriving worth from market confidence and central bank policies.
The shift from Gold to Fiat in 1971, saw the U.S. abandoning the Gold Standard, allowing central banks to manipulate interest rates and money supply more freely. The heyday of Fiat currencies from the 1980s onwards, lasted until the 2008 Credit crisis. Since then, central banks have reversed course, becoming net buyers of gold to hedge against growing financial risks.
Geopolitical Gold Investment Drivers
1. Geopolitical Instability Intensifies:
Gold has always been the safe-haven asset during uncertainty, and today’s geopolitical climate is no exception. Beyond the ongoing Russia-Ukraine and Middle Eastern conflicts, fresh escalations have erupted in the South China Sea, with Chinese naval drills heightening tensions with American allies like the Philippines and Japan, further unsettling markets. Additionally, instability across West Africa, driven by attempted coups and resource grabs, has rattled commodity markets, while growing friction within NATO over defence spending has created a new layer of unease. Adding fuel to the fire, Trump’s renewed tariff war, targeting both China and key trading partners, has reignited fears of a global trade breakdown. All of this unfolds against the backdrop of record-breaking global debt, now surpassing $320 trillion.
2. Central Banks Activity:
In March 2025 alone, central banks purchased 127 tonnes of gold, with the Central Bank of Turkey and the People’s Bank of China leading the charge. The IMF recently noted that over 25% of emerging market reserves are now composed of gold — the highest held amount in over 50 years. Effectively central banks, sensing a major global monetary reset on the horizon, are racing to bolster their gold reserves.
Russia’s Ever-Gilded Strategy:
Russia’s debt default of 1998 led to renewed focus on building gold reserves. But fast forward to international sanctions with the freezing of Russian assets and cutting off much of its access to the SWIFT system thereby limiting the Kremlin’s ability to obtain U.S. dollars, Russia shifted its focus toward gold and alternative payment methods.
Domestically, as the Ruble falters and inflation soared, Russian consumers sought refuge in gold, buying up 8% in Q1 2025 and a record 75.6 metric tons in 2024 — a 6% rise from 2023 and a striking 62% leap from pre-Ukraine conflict levels in 2021.
Russia is a leading gold producer, mining over 300 metric tons annually, primarily from regions like Siberia and the Far Eastern Federal Districts. But Russia’s bid to capture other gold flows have seen the deployment of state-backed paramilitary group, Wagner (now known as the African Corps) successfully extracting and smuggling gold from African nations, notably through its operations in Sudan, Central African Republic, Mali and Niger. Gold is easy to transport across borders, has intrinsic value and is easily exchanged for hard currencies.
China’s Expanding Gold Dominance:
Over the past two decades, China has become the world’s dominant buyer of gold, driven partly by retail investors seeking a safe haven amid stock market volatility and a deepening real estate downturn. Chinese citizens face strict capital controls making it difficult to move wealth offshore, therefore gold has become a preferred channel for diversification outside China’s domestic financial system.
In a major policy shift, in March 2025, Chinese financial authorities fast-tracked gold access for pension funds and insurance companies — a move expected to redirect an estimated $200 billion into the gold market (previously restricted due to requirements for stable cash returns). This comes amid rising concerns over banking sector solvency. Meanwhile, Belt and Road Initiative (BRI) payments are reportedly shifting toward partial gold settlements in key African and Asian partnerships, potentially further undermining dollar dominance.
Interestingly China’s central bank, the PBOC, has steadily increased its gold reserves over the past decade. After a six-month pause in reported purchases during 2024, China resumed acquisitions, adding 12.8 tonnes in Q1 2025 to lift its official holdings to 2,292 tonnes — signalling an enduring commitment to hard assets over dollars.
Finally, in March 2025, China’s Ministry of Natural Resources formally verified the discovery of a 1,050-tonne gold deposit in Hunan — a find that, if true could surpass South Africa’s South Deep mine as the world’s largest reserve. However, doubts remain over China's reporting standards, and commercial production could take years to materialise.
America’s Gold Revaluation Campaign:
The U.S. Treasury still values its gold reserves at $42.22 per ounce, a figure unchanged since 1973. At current market prices c. $3,500, the real value of America's 261.5 million ounces would approach $915 billion, compared to the official book value of just $11 billion.
This discrepancy has sparked discussions and in March 2025, a draft bill proposing a gradual "re-monetisation" of gold via Treasury certificates surfaced, aiming to revalue official U.S. gold reserves at market rates. This could lead to significant implications for the U.S. government's balance sheet and fiscal policy. Though still highly speculative, the mere notion has turbocharged gold's rally.
4. Market Sentiment (“Animal Spirits”):
Investors are recognizing the fragility of the current monetary system and so increasing their exposure to Gold. Henceforth, with central banks buying, institutions reallocating, and retail investors racing for exposure, a golden momentum has taken hold with Ray Dalio, the high-profile Hedge Fund Manager declaring in a recent Bloomberg interview on 31st March 2025 that "Gold is no longer a hedge; it’s now the only true money."
Where to Buy Gold:
Obviously, we’d love to usher all Magpies into our bejewelled online emporium that is Baroque Rocks but if you are after proper bars of the stuff then either go to The Royal Mint or Sharpes Pixley:
The Royal Mint for Gold Sovereigns, Britannias and bars:
It’s useful to know that Gold Britannia’s are bigger with a 1-ounce weight and are 24K.
Whereas Gold Sovereigns are smaller weighing 7.98 grams and are 22K.
https://www.royalmint.com/shop/gold/gold-bullion-bars/
Sharpes Pixley for bars (any size 24K)
https://www.sharpspixley.com/buy-bullion/buy-gold/gold-bars
And if you don’t want the physical efforts one can even buy Gold ETF (Exchange Traded Funds) such GLD or PHYS for ease.
In conclusion, Gold’s appeal is shining brighter than ever. With its low volatility, high liquidity and physical durability it remains the ultimate reserve asset for governments (central banks), institutions, and prudent magpies alike. Only a miraculous global debt repayment could dim Gold’s glow and that seems highly unlikely in the foreseeable future. As the world faces rising uncertainty, de-dollarisation and financial system soul searching, one thing is abundantly clear: Gold’s role as the king of commodities is more secure than ever!!! Go Gold Bugs Go!
Stay sparkling!
With love from Emma and the Baroque Rocks Team
P.S. If you like what you read and it brings a smile, do spread the sparkle and share it with friends!
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