Gold at €4,500: Does it Really Protect Savings?

Gold at €4,500 an Ounce: The Haven That Doesn't Always Offer Shelter

Gold has been stuck around €4,500 per ounce for a quarter. Silver has neared $90. A single-day 3% drop was enough for someone to estimate a trillion dollars lost in the metals market, though much of that figure later recovered. The question surrounding this asset for over a decade isn't whether it rises or falls, but whether it still serves its supposed purpose: shielding savings when everything else collapses.

The doubt is not trivial. Those who bought at €45 per gram a few months ago look at their safe with less enthusiasm than before, while the cost of living continues to rise. This is the contradiction that hovers over every serious discussion about the metal: if the euro loses value daily, why does gold, measured in euros, sometimes fall?

A Price That Rises in Dollars and Falls in Euros

The technical explanation exists and is more tedious than it seems. Gold is internationally priced in dollars. When the euro-dollar exchange rate moves, the ounce can be rising in US currency while falling in European currency. Someone precisely summarized it: it's about the euro-dollar ratio; in dollars, the metal was rising. Translated: it's not that gold is plummeting, but that the euro is strengthening against the greenback, and the conversion does the rest.

This offers little comfort to the individual who bought the metal expensively. For them, the relevant calculation is in euros, period. And here comes the second argument, which claims the metal doesn't fail but is measured incorrectly. The underlying idea is that gold maintains a roughly constant purchasing power, and it's other things that fluctuate around it. On gold-dollar charts, one would only see the metal increasing its exchange rate because all fiat currencies are steadily losing value: not because gold is better, but because paper money is worsening.

The problem with that reasoning is that it requires decades of patience. In the short term, gold can easily remain flat or lose value while the supermarket prices rise. The promise of a safe haven is long-term; the pain, short-term.

Who Really Decides the Price of Gold

Much of the discontent with the metal is channeled into an old suspicion: that the price is manipulated. The accusation is always directed at the same entities—large banks, funds, central banks—and claims that gold should be much higher than its current trading price, with prospects of multiplying in value within a few years. This is not a fringe theory: during peaks of euphoria, it's often repeated that the metal is being artificially held back.

Alongside this exists a more down-to-earth explanation. Those who operate the market daily explain that most gold contracts never reach physical delivery: they are closed or rolled over, and paper is settled with paper. 95% of traders want profits, not ingots. When someone claims that "there are too many contracts for too little metal" and that the market is about to collapse, that analysis usually comes, according to the most seasoned traders, from someone interested in selling metal or from someone who doesn't understand how the clearing house works.

However, the suspicion never fully dies. When the metal falls precisely when it should be rising the most, the manipulation theory gains traction, and no data can dismantle it.

2020: Drawers Emptied and Paper Gold Trembled

The episode that best illustrated this struggle was the 2020 lockdown. For weeks, mints closed, orders were delayed, and shops sold all their stock. Those who wanted to buy ounces were met with "out of stock" signs and prices dictated by demand, not the market. Within hours, a box of coins went from non-existent to being sold non-stop and selling out again.

This phenomenon has a name: a gold run. It's the equivalent of a bank run, but on metal: many people wanting physical gold at the same time instead of treating exchange-traded funds like any other commodity. If you go to buy two ounces one day and all the shops have sold-out signs, the run has already peine, and you're too late.

In parallel, the metal experienced a notable plunge after a record year of physical deliveries. An analysis circulating attributed the crash to the management of those giant expirations, with December being the busiest month. The correction didn't change the underlying trend, they argued, but it served to make those who advocated for an unassailable bullish scenario eat their own euphoria.

The 1800s Salary and the Gold Ounce: The Recurring Statistic

The historical argument is the most elegant of all. Two centuries ago, an average craftsman earned four silver reales per day. In a month, he would save eight escudos, meaning one gold ounce, about 27 grams. Translated into today's euros, that salary was equivalent to that of a modern worker. Conclusion: in 200 years, gold has preserved its purchasing power while nominal wages have done somersaults.

The example is reinforced by others more colorful. A Confederate war officer's revolver cost the same as an ounce of gold: it didn't matter if it was $30. Whoever saved the dollars has dollars today; whoever saved the ounce has, at current exchange rates, the same €2,000 as the original weapon. The sarracena is always the same and always uncomfortable: perishable paper evaporates; what is not printed endures.

Even so, the historical data has a catch: centuries are very long. In the short term, gold has had memorable ups and downs. Those who bought at the 2011 peak waited years to see their money again. Not everyone has the patience that argument demands.

Bitcoin, the Rival Devouring the Metal

The most heated debate in recent years is not about price, but about succession. A recurring thesis suggests that a significant portion of money that previously went into gold has now moved into cryptocurrencies, which are more convenient, more liquid, and don't require safe deposit box rentals. At times, this shift was blamed directly for the metal's declines.

The counterargument is swift. Bitcoin's capitalization is a fraction of gold's—which at the time was valued at about nine trillion dollars—and it's not a threat as long as it remains small. The underlying suspicion is that a cryptocurrency without state backing will not last when states want to regain the monopoly of issuing their own digital version. The idea circulates ironically: bits for the plebs; the real thing for those in power. Gresham's law, they say, dictated the sentence centuries ago: bad money drives out good.

Within the metal community itself, both stances coexist. Many hold both gold and bitcoin. And that, some argue, is what prevents the battle from being decided: the metal doesn't compete, it coexists.

Pension Funds Enter Through the Main Door

The least publicized but most consequential movement is institutional. Pension funds in Texas and Ohio have begun including gold in their portfolios; the latter with an allocation of 5% as a hedge against risk and inflation. The interpretation was clear: institutional players arrive first; later, when the price is much higher, the general public enters. This sequence, for many, will be the greatest wealth transfer of the century.

The least commented-upon data comes from a country few people watch. The central bank of Uzbekistan accumulated 315.7 tons of gold, more reserves than Spain with ten million fewer inhabitants and a GDP five times smaller, and added 8.2 tons in a single month. If this institution facilitates its population saving in metal, the effect could be enormous in a country of 37 million people.

This is not an isolated case. A calculation circulating in the thread estimates that around 190,000 tons of gold have been extracted throughout history, with a market capitalization of $10.3 trillion; alongside this, colossal daily trading volumes exist in the London market, around 939 tons per day. A market like this is not moved by a single trader, no matter how much the conspiracy theory insists.

Where the Debate Gets Stuck

In the final stretch of the discussion, the scene repeats: gold has been around €4,500 for a quarter, silver is nearing $90, and any 2% correction is seen as a plunge. Those who hold steady remember that a 3% drop is not a collapse, but normal volatility, and that silver always amplifies gold's movements—downward and upward—due to its lower liquidity. Those who entered late, however, look at the chart as if they arrived at the party when the lights were being turned off.

There is one detail that unsettles everyone. Indian demand, a major market thermometer, suddenly slows its purchases, and the price cools. No one knows if this is a false alarm or the beginning of something. And there, precisely there, is where the analysis runs out of answers: if gold maintains its purchasing power for two centuries but can lose it for two years, for whom is it truly a safe haven? The metal doesn't answer. It just waits.