Why is silence golden? Because it is often, in situations of tension, the sufficient antidote. The safest refuge. Just as it is the precious metal in situations of crisis, economic and geopolitical. Something that has been confirmed over time, an inviolable rule in the language of markets and investors, but also of ordinary people: The legend of the gift that is given to a child in the form of a gift is one that has lasted for generations.

Gold is still shining today, becoming ever more valuable, ever more expensive. For some time now, its price has been steadily rising on international markets, breaking all records. Defying the predictions of even the most optimistic analysts, its price broke the barrier of even 2,705 dollars per ounce a few days ago, after successive historic highs. The gold bar, which on the London market, the world’s precious metals trading center, weighs 400 ounces, has now exceeded $1 million in value. Many houses and analysts already estimate that the rally will continue during 2025. Where is the ceiling? Still unknown.

However, the basic market rule for a commodity that wants its price to depend on supply and demand is inexorable. The demand for gold is constantly rising as, apart from the investment security it provides, its uses are expanding to an astonishing extent, particularly in new technology and Artificial Intelligence, but at the same time its deposits now seem to be drying up. In a word, gold is becoming increasingly expensive, in the literal sense of the word.

Rise 30% this year

Gold’s investment valuation seems elusive over time. Since the beginning of the year the rise is approaching 30% or $570 per ounce. But since the turn of the millennium gold has made a return jump of 811%. If someone had bought gold in 2008, at the beginning of the global financial crisis, at a price then below $900 per ounce and held it in their portfolio, they would have earned close to 200% today, an average of 12% per year. Returns are extremely high, considering that gold is one of the most defensive investments.

Still, in one of the most popular traditional “gold” investments of Greeks, the golden pound (lira), at the end of 1999 it was worth around 65-70 euros, while today it is worth 550-600 euros. A 25-year yield of 700%! And the question is whether gold will exceed $3,000 per ounce within 2025. The majority of the opinions of the experts of leading international investment houses and analysts, including those of Citi and Goldman Sachs, believe that yes, it will probably exceed it by mid-2025.

The reasons are many. What does all this rally illustrate? First, it confirms that gold remains the safest time-honoured refuge in times of crisis, whether geopolitical, let alone in times of dangerous warfare, as today, or very serious economic shocks with a global dimension. In times of strong uncertainty (this is the fuel), investors cling to the metal that has been considered a source of stable value for centuries, bypassing all other turbulence.

Thus, gold has experienced three separate rallies since 2000. First in the 2008 financial crisis. Then the more than 25% gains it offered in 2020, when under the weight of the global lockdown of economies, heavy supply chain turmoil and the explosion of global inflation that followed the onslaught of the COVID-19 pandemic, investors unhesitatingly rushed to buy gold.

Also, it is no coincidence that the volume of global gold purchases by central banks has tripled since Russia’s invasion of Ukraine in early 2022. From which the energy crisis emerged, while inflationary pressures were further amplified. This is essentially a particular, second reason. Many central banks, particularly outside the Western system of countries, have been making aggressive gold purchases over the last two years.

Russia’s freezing of hundreds of billions of dollars of assets following the invasion of Ukraine has also troubled the leaders of other countries, such as China, India, and Turkey, who are rushing to reduce dollar and euro exposure and increase gold reserves. At the same time, the number of countries joining or aligning themselves with the BRICS is growing and all of them are trying to break free from the dominance of the dollar in their mutual, as well as international, transactions. The ever escalating conflict in the Middle East dominates, while the war in Ukraine continues. And with Goldman Sachs, in addition to the above, adding to the reasons triggering massive gold buying this year in particular the rise in US federal debt and the resurgence of large inflows into exchange traded funds (ETFs). Two more reasons.

Also, a fifth reason, investor anticipation of further interest rate cuts by central banks, notably the US (Fed) and ECB. Lower interest rates reduce the opportunity cost of buying gold, which does not offer, but is therefore not dependent on interest. Making it more attractive, relative to interest-bearing assets such as US bonds, which compete with gold as a safe haven.

Further, lower interest rates also put pressure on the dollar, which is steadily declining, making gold, whose market is universally priced in dollars, more attractive to holders of other currencies. Finally, the US elections are also an unpredictable factor for the markets. Especially if their outcome is contested by the loser and points to a period of political instability for the world’s largest economy.

JP Morgan analysts a few days ago identified the gold price at $2,850 per ounce in the first half of 2025. UBS and Bank of America respectively see it at $2,700 per ounce. The point is that they all converge that “despite hitting multiple highs this year and outperforming the major stock market indices, gold has more room to continue its rally over the next 6 to 12 months.”

Increasing uses

Two additional factors, however, that many are increasingly taking seriously as responsible for gold’s price take-off are the precious metal’s increasing uses and, at the same time, the inability to increase its production. Very briefly, gold, due to its excellent intrinsic properties such as its malleability (ability to be formed under pressure), conductivity and resistance to corrosion, is increasingly being used in the medical, electronics, automotive, defence and aerospace industries.

In medicine in particular, gold is now essential in diagnostic systems, drugs, treatment of many types of cancer, in the treatment of arthritis and chronic ulcers, and is used in surgery to coat damaged blood vessels, nerves, bones and membranes. Surgical lasers also use gold.

As a very good conductor of electricity, gold does not corrode at high or low temperatures and is therefore widely used in circuits from televisions to computers, telephones, etc., and also in satellites as part of their electronic circuits and as a heat shield. Because it reflects heat, it is used to protect astronauts, satellites and critical electronic components from the negative effects of dangerous X-rays and cosmic radiation. On the other hand, the rapid growth of cloud computing due to the AI boom has increased the demand for high-tech communication chips, boosting the demand for industrial gold.

It is no coincidence after all that about 79 tonnes of gold were utilised for industrial and technological applications in the first quarter of this year, according to data from the World Gold Council (WGC). Overall, gold demand for electronic applications alone rose 13% year-on-year to 64 tonnes.

Difficulty of mining

Meanwhile, it is becoming increasingly difficult to find and mine new quantities of gold, making the precious metal scarcer and more expensive. Although the first quarter of the year saw record production, with a 4% year-on-year increase, however, according to WGC’s head of market strategy John Reid, mine production essentially stabilised around 2016 or 2018, and there has been no meaningful increase since then.

To date, approximately 187,000 metric tonnes of gold have been mined. The majority comes from China, South Africa and Australia. Gold reserves that can be mined in the future are estimated at about 57,000 tonnes, according to the US Geological Survey. All the evidence therefore suggests that the major gold deposits have already been explored and it is becoming increasingly difficult to find new ones.

Even in the case where there are – as yet unknown – unexplored large deposits, according to the WGC, large-scale mining requires capital intensive and significant exploration and development. Bear in mind that only 10% of the world’s gold discoveries contain enough metal to justify a mining investment.

Besides, beyond the investment part of the mine itself, there are other costs that go along with it. Such as building roads and infrastructure for power and water, as mining projects often involve remote areas, financing operations, and the usually lengthy bureaucracy for permitting. It takes an average of 10-20 years before a mine is ready for production.

Global reserves

Most of the world’s gold is held by central banks, which hold these reserves because of their safety, liquidity and yield characteristics. They hold 1/5 of all gold mined. China has been the largest buyer for two years, although its People’s Bank ended its stockpiling in May.

According to WGC data, global central banks have exceeded 1,000 tonnes of net purchases for two years in a row. In the first half of this year alone, central banks purchased 483 tonnes of gold, equivalent to nearly 40,000 bars, setting a new record.

Turkey was the champion buyer, acquiring a total of 44.74 tonnes. There is an explanation. Apart from the central bank, demand for gold exists in the country from private individuals. With inflation at 70 percent and prices rising daily, the precious metal is a hedge against the challenges of the economy for those who can physically afford to buy it.

Turkey’s central bank funneled much of its gold into the domestic market to meet increased demand when the government decided to impose limits on imports to improve the current account balance, WGC reports. It was followed by India buying a total of 37.18 tonnes of gold and China, which…limited to 28.93 tonnes.

At the opposite end was the central bank of the Philippines, which sold the most gold this year, some 24.95 tonnes or 15.7% of its total reserves.

The country with the most gold today is the United States. The Treasury Department and the Federal Reserve Bank hold more than 8,133.46 tonnes in the form of gold bars and coins, with a current value of about $640 billion. Half of this is stored at the US gold depository known as Fort Knox, a US Army installation in Kentucky. Germany follows with a stockpile of 3,351 tonnes, followed by Italy with 2,452 tonnes.

The Greek Fort Knox

Gold with a total value of €8.315 billion and weighing 151 tonnes is held by the Bank of Greece, based on data for 2022 (December 31, with the price per ounce at €1,706), compared to €7.828 billion (per ounce at €1,609 in 2021). Today, of course, with the rapid rise in the price of gold up to 2,700 dollars per ounce, the value of the Greek reserves has soared to more than 13 billion dollars. 47% of this is kept in the heart of Athens, in the absolute sanctuary of the Treasury, in the depths of the earth, specifically in the fourth basement of the BoE building on Panepistimiou, in a secret room protected by a ferocious armoured door weighing around 100 tonnes. Security measures are draconian and access is – it is understood – impossible. The rest of the Greek gold is divided between the United States (29%), Britain (20%) and Switzerland (4%).

The 151 tonnes of gold includes:

■ the BoE’s holdings of international gold and sterling (3,673.3 thousand ounces as at 31 December 2022),
■ gold claims against the Greek Government (985.6 thousand ounces at 31.12.2022), arising from Greece’s participation in the IMF,

■ non-international gold and gold coins (215,4 thousand ounces at 31.12.2022).
Map of mines

As gold is a stable economic value over time and a safe haven for investment in modern times, its deposits constitute an essential source of wealth, providing not only economic vitality but also geostrategic importance for the producing countries.

Today there are 980 gold mines in operation around the world. Apart from the traditional producing countries such as the USA, Canada and Australia, there are also mines in China, South America, Russia, Turkey and in Europe in Sweden, Finland, Spain, Ireland and Portugal.

In Sweden and Finland alone there are 10 gold mines in operation, which is indisputable proof of the feasibility and compatibility of these projects with the highest, worldwide, environmental standards following European legislation.

The Balkan geological arc, from Romania to Turkey, with large and rich gold deposits, already being exploited in neighbouring countries, is also well known. Moreover, according to an earlier study by the Institute of Geological and Mineral Exploration (IGME), in Northern Greece alone there are proven gold reserves of at least 450 tonnes, which, at the current price of the metal, are worth more than 43 billion euros.

The Skouries

A year ago, Ellinikos Xrysos, a subsidiary of Canadian group Eldorado Gold, unveiled plans to start operating its mine at Skouries in Halkidiki within two years, which will combine underground and surface mining. The company’s $1.9 billion investment plan for the deposits, with an estimated life of 20 years, envisages the full development and operation of the mining facilities at Skouries, Olympiada and Stratoni in Halkidiki, making Greece the leading gold-producing country in Europe.

The company’s goal, after the adventures that its investment effort experienced under the SYRIZA government, is for the mines to produce a total of 140,000 ounces annually when fully developed, a quantity that ranks Greece as the third European producer of the “king of precious metals”. Behind Finland and Sweden, with a production of 247,500 and 260,400 ounces of gold respectively. Eldorado Gold, through its Olympiada mine that entered the production phase in 2017 and has an estimated life of 15 years, produced about 67,000 ounces of gold last year.

However, in many areas of Greece various prospectors, as well as would-be prospectors, are searching for gold. Almost the entire length of the French River, from its source at Krossia in Kilkis to its mouth at Thermaikos, they can be found in work uniforms picking and sifting sand using a particular technique.

In antiquity, the French River was called Echedoros, the one with gifts, and is referred to by historians as being rich in gold nuggets, which are found in some interesting concentrations on the banks of both the Axios and the Struma. Between 1953-1960 a mining company collected along the French 1,355 tons of gold, with a content of 0.30 grams per cubic meter.