Gold Surpasses $3,500, Demand Growth Recorded in Croatia

Demand for gold as an investment in Croatia has significantly increased this year, with over 350 million euros invested in gold in the first half of the year, surpassing the total demand for the entire year of 2024, says the director of the Gold Center Saša Ivanović.

– The continuation of strong demand due to factors such as inflation, geopolitical instability, and fears of recession is also being recorded in the second half of the year, so we expect investment volume in gold to exceed half a billion euros by the end of 2025, Ivanović tells us.

Gold prices surged today to a record level, surpassing the previous record from April when the rise of this asset class was fueled by ‘Liberation Day,’ during which U.S. President Donald Trump announced tariffs on nearly all countries in the world.

The price of gold this morning exceeded $3,508.70 per ounce, and by 6:00 PM, it reached $3,518 per ounce. Demand for gold has increased as investors see it as a hedge against inflation and broad macroeconomic uncertainty.

Growing concerns about the independence of the Federal Reserve after Trump pressured the president of that institution Jerome Powell and attempted to remove governor Lisa Cook have spurred the latest rise. Investors are worried that inflation could rise if interest rates are lowered due to political pressure.

Silver also climbed to a record level on Tuesday, increasing by 0.3 percent to $40.8 per ounce. The metal continues to trade at lower prices compared to gold relative to historical average prices, although this gap has narrowed in recent months amid rising investor interest.

Diminishing hope for a quick resolution to the war in Ukraine, as promised by Trump, has supported higher prices for these metals, as have inflows into ETFs. Analysts at Goldman Sachs therefore predict that gold prices will reach four thousand dollars per ounce by mid-next year.

Prices Have Doubled in Two Years

Gold prices have nearly doubled since the beginning of 2023 as central banks increase their holdings and investors seek protection from inflation. Last year, this metal surpassed the euro and became the second most common reserve asset of central banks worldwide after the dollar, accounting for 20 percent of global official reserves.

Ivanović also stated this week that besides gold, silver is experiencing a strong surge, reaching its highest levels in the last 14 years. The price of silver has broken the $40 per ounce barrier, and many analysts expect continued growth in the period ahead.

The high growth of gold and silver prices has brought considerable profits to investors in these precious metals in recent years. Gold and silver prices in euros have increased by about 30 percent over the past 12 months, with gold particularly standing out with an average annual increase of over 10 percent over the last 20 years.

Such growth is significantly higher than many other investments such as real estate, treasury bills, or bonds, and is more than sufficient to cover the negative impact of inflation on citizens’ cash savings. High returns are the main motivator for investors in gold and silver, which are increasingly sought after, claims Ivanović.

– Profit always attracts investors, but it is not the only factor. The fact that gold bars and coins are exempt from all taxes, easily transferable, and liquid is also very important, while with silver, the focus is on the significant potential it holds for the future due to its wide industrial applications in modern technologies, Ivanović notes.

In any case, he continues, investment gold and silver are no longer just an alternative type of investment chosen by a smaller number of wealthier individuals, but have become part of the investment ‘mainstream’ that attracts an increasing number of ordinary citizens.

Indeed, investment gold is increasingly mentioned, but the number of physical branches offering this service in Croatia remains stable and without major changes. However, Ivanović confirmed to us that what has changed is the number of investors acquiring gold bars and coins online, without the need to visit a physical branch.

– At the Gold Center, we are recording a significant increase in the number of such purchases, indicating a rise in trust among investors when it comes to purchasing gold ‘remotely,’ concludes Ivanović.