A gold bar with the inscription 'CREDIT SUISSE ONE OUNCE FINE GOLD 999.9' standing on a surface, surrounded by electronic components and a circuit board, with some yellow solar cells and blue resistors nearby.

Gold has gone up over 900% from 2005-25 (source: Goldprice). Meanwhile, the buying power of £1 has dropped to just 50p due to inflation and the ongoing printing of money.

Gold has a long history of performing well in uncertain times (recessions, wars, weakening markets, political developments, international issues, etc.):

There are many factors that drive the price with each individual factor able to propel the value of gold upwards by itself. Yet often, these factors work at the same time to drive even further growth.

Small gold and silver bars resembling gold bars stacked and scattered on a gray surface.

Interest Rates

Gold can benefit from both lower and higher interest rates. Lower interest rates suggest a weaker economy, which can turn people away from stocks and shares and towards gold.

Meanwhile higher interest rates can lead to more mortgage defaults, etc. which can push people towards gold as a form of wealth insurance.

Stack of gold-colored bars engraved with 'Credit Suisse,' 'One Ounce Fine Gold,' '999.9,' and a serial number, placed on a metallic ribbed surface.

Inflation

As goods and services become more expensive, your cash buys less and less. As a result, if your earnings and investments are not keeping up with inflation then unfortunately you will be getting poorer.

As inflation damages the value of cash, many people are inspired to move their wealth into gold for added protection.

Two yellow trail signs attached to a wooden post, indicating walking routes with a hiker icon. The signs point in different directions, with the background showing green leaves and a blurred sky.

Uncertainty

At times of national or international uncertainty (created by the political, social, economic, etc. situation), people naturally want to reduce their risk and protect what they have.

As gold is considered a safe-haven asset, this uncertainty can increase the demand for gold, and therefore increase its price.

A collection of various banknotes from different countries, including US dollars, euros, British pounds, and Japanese yen.

Currency Movements

The price of gold is dollar denominated. As a rule, when the dollar is weaker, relative to other currencies worldwide, the price of gold tends to increase in US dollar terms. This is because people want to move their wealth away from the dollars and into gold.

Close-up of a gold nugget with a porous, irregular surface against a black background.

Gold is a finite resource. When compared to the 1970, 80s, and 90s, far fewer 50+ million, 30+ million or 15+ million ounce gold deposits are now being found, with mining production having levelled since 2016 (source: Investopedia). This decrease in gold supply can then lead to higher gold prices.Gold has many uses beyond becoming coins or bars - the jewellery market accounted for 55.4% of the global gold demand in 2022 and projected to register the fastest growth of the entire jewellery market from 2022 to 2030 (Source: Statista).

These factors can have a significant impact on gold coins over time.