Inflation as a Driver of Gold Prices

Due to the war in Iran, prices in the U.S. rose by 3.3 percent in March compared to March 2025, according to the Bureau of Labor Statistics. About three-quarters of the increase was due to high gasoline prices. In February, inflation was still at 2.4 percent compared to the same month the previous year. The situation is similar in Germany. According to the Federal Statistical Office, the inflation rate in March was a whopping 2.7 percent. In times of rising inflation, gold is often used as a hedge against loss of purchasing power.

Another factor driving the price of gold is the geopolitical situation. Wars and conflicts prompt investors to shift their capital into safe-haven assets, particularly gold. This is because gold is independent of companies or governments. Furthermore, it can be traded globally and offers excellent liquidity. Not to be overlooked is the long-term preservation of value that gold has demonstrated for a very long time. The strength or weakness of the U.S. dollar also affects the price of gold. Currently, the U.S. dollar is rather weak, which is good for gold.

The recent drop in the gold price hasn’t stopped analysts and banks from raising their gold price forecasts – for example, Commerzbank and UBS. That’s because hardly anyone expects the price dip to be sustained. And sooner or later, the Federal Reserve will cut interest rates, which in turn will weaken the US dollar and strengthen the gold price. Investors can bet not only on physical gold but also on the mining companies that hold the precious metal in their projects.

Fury Gold Mines, – https://www.commodity-tv.com/ondemand/companies/profil/fury-gold-mines-ltd/ – which is well-financed, has a gold and mineral exploration portfolio totaling over 157,000 hectares in Quebec. The company also owns 11.3 million common shares of Dolly Varden Silver Corp. In 2025, the company drilled a total of more than 18,000 meters at its projects. Encouraging drill results were recently reported from the Eau Claire project (for example, 11.74 grams of gold per ton of rock over 6.63 meters).

Southern Cross Gold Consolidated – https://www.commodity-tv.com/ondemand/companies/profil/southern-cross-gold-consolidated-ltd/ – owns the Sunday Creek project in Australia. It contains gold and antimony. Excellent recent drill results, such as 17.3 meters grading 22.9 grams of gold per ton of rock, indicate significant exploration potential. The company’s common shares were recently added to the VanEck Junior Gold Miners ETF and the FTSE Canada All Cap Index.

Current company information and press releases from Southern Cross Gold Consolidated (- https://www.resource-capital.ch/en/companies/mawson-gold-ltd/ -) and Fury Gold Mines (- https://www.resource-capital.ch/en/companies/fury-gold-mines-ltd/ -)

Further information is also available in our new Precious Metals Report at the following link: https://www.resource-capital.ch/en/reports/view/precious-metals-report-2025-04/

Sources:

https://www.msn.com/de-de/finanzen/top-stories/us-inflation-teuerungsrate-in-den-usa-steigt-auf-3-3-prozent/ar-AA20ARwc;

https://www.wiwo.de/politik/deutschland/inflation-in-deutschland-verbraucherpreise-auf-hoechstem-stand-seit-anfang-2024/100215673.html;

https://www.resource-capital.ch/en/reports/view/precious-metals-report-2025-04/

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