Gold Rush: Individuals and Central Banks Stockpile Physical Gold Amid Global Debt Crisis

Eric Vazquez, a lineman for a power company in southwest Florida, has amassed a significant amount of gold, both in his investment portfolio and physically in bars and coins spread across multiple secure locations. This strategy is driven by his concerns over the increasing chaos in the world, as governments continue to overspend, and stock prices can plummet due to a single tweet, making it imperative for him to ensure his family’s safety. While rising interest rates typically make gold less attractive to investors, the recent surge in gold prices, up over 40% since October 2022, has confounded analysts. This trend is attributed to widespread stockpiling by individuals and institutions, particularly in Asia and the Middle East, where citizens seek physical gold as a safe haven during uncertain times. Central banks have also increased their gold holdings, doubling their rate of purchase following Russia’s invasion of Ukraine in 2022 and retreating from dollar-based assets such as Treasuries due to sanctions. As global debt continues to skyrocket, investors are turning towards gold, which has outperformed inflation since 1913 and the S&P 500 since 2000, according to Barry Kitt, a former hedge-fund manager who now runs a family office. Many believe that gold prices could soar further as the financial market catches up to the physical market. However, some investors prefer physical gold, like Kitt, who owns several large crystalline nuggets, as opposed to ETFs, emphasizing that “you don’t own gold; you own a piece of paper.”