Gold Price Reaches Historic High of 24,414 Yen per Gram
On December 22, 2024, major precious metals dealer Tanaka Kikinzoku Industries set its retail gold price at 24,414 yen per gram, marking a new all-time high for domestic gold prices in Japan.
Just a few years ago in 2020, gold was trading around 6,000 yen per gram. The price has since surged dramatically in 2024, reaching nearly four times that level. Compared to the 1990s three decades ago, gold prices have increased more than 15-fold, indicating that the gold market is experiencing a historic bull run.
Five Key Factors Behind the Gold Price Surge
1. Rising Geopolitical Risks
The prolonged Russian invasion of Ukraine, escalating tensions in the Middle East, and conflicts over the Taiwan Strait have created ongoing instability worldwide. When such geopolitical risks surface, investors withdraw funds from stocks and bonds, accelerating the flow into gold as a safe-haven asset.
Following Russia's invasion of Ukraine in 2022, gold demand surged significantly, pushing prices sharply higher. Each time war or international conflict heightens uncertainty about economic and financial market prospects, gold fulfills its role as a refuge asset.
2. Massive Central Bank Purchases
Global central bank gold purchases have exceeded 1,000 tons annually for three consecutive years since 2023. This represents approximately 30% of annual production and provides strong price support. Central banks in emerging economies, particularly China and Russia, have accelerated their "de-dollarization" efforts by purchasing gold to diversify foreign exchange reserves.
3. Continued Yen Weakness
The interest rate differential between Japan and the US has maintained a weak yen/strong dollar environment. When the exchange rate moves toward yen weakness, gold prices in yen terms rise even if international market prices remain unchanged. President Trump's announcement of tariffs on Japan in spring 2025 temporarily accelerated yen selling.
4. Supply Constraints and Sustained Demand
Annual mine production remains around 3,300-3,600 tons, while developing new mines requires enormous costs and many years. Global confirmed reserves are estimated at approximately 59,000 tons, with supply growth slowing. Meanwhile, gold is used not only in jewelry but also extensively in semiconductors and electronic devices as an industrial material, making a sudden demand collapse unlikely.
5. Growing Institutional Investor Demand
While gold was previously less favored as an investment due to yielding no interest, awareness of "the risk of not holding gold" has grown in recent years. Seeing gold's outstanding investment performance, fund managers in Europe and the US, along with Japanese investors, began buying en masse, contributing to the sharp rise from September 2024 onward.
Platinum and Silver Price Trends
Platinum: Stable Long-term Outlook Despite EV-Related Demand Decline
Platinum peaked at 7,589 yen per gram in 2008 before falling to less than half that value due to the Lehman Shock. As of 2024, platinum prices hover around 5,000 yen per gram.
While demand exists for automotive catalytic converters, the shift to electric vehicles (EVs) raises concerns about declining catalyst demand. However, with applications in hydrogen fuel cell vehicles and industrial uses, platinum is expected to maintain stable long-term pricing as a rare metal.
Silver: Rising on Both Industrial and Investment Demand
Silver prices have increased approximately fivefold from around 20 yen per gram in the early 2000s to about 100 yen currently. In 2024's investment performance, silver actually outpaced gold with a 96% gain versus gold's 61%.
Silver demand is expanding in green energy industries like solar panels, while industrial applications remain robust. Although supply is more than five times that of gold, keeping prices relatively lower, the growth of renewable energy industries supports long-term price appreciation.
2026 Outlook: Gold May Break Through $5,000
Many experts express bullish outlooks for 2026 gold prices, with predictions frequently citing potential rises to around $5,000 per troy ounce in international markets.
Factors Supporting Gold Prices in 2026
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Reduced Dollar Appeal from US Rate Cuts: The Fed's continued rate cuts are expected to sustain gold buying momentum.
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Concerns Over Elevated Stock Valuations: Anxiety about high stock valuations may increase demand for gold as an alternative to equities.
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US Fiscal Concerns: Political division heading into the November 2026 US midterm elections and fiscal issues could undermine confidence in the dollar, prompting flight to gold as a safe haven.
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Continued Central Bank Buying: Gold purchases by central banks, particularly in emerging markets, are expected to persist.
Platinum and Silver Outlook for 2026
Platinum actually outperformed gold with an 84% gain in 2025. Further advances are possible if new demand develops in hydrogen energy and industrial applications.
Silver recorded a massive 96% increase in 2025, with the expansion of green energy industries providing tailwinds. Both industrial and investment demand are expected to drive price gains in 2026.
Long-term Perspective: 117x Over 50 Years, Potentially 100x in Next 50
Some experts offer the bold prediction that "gold prices increased 117 times over the past 50 years and could rise another 100 times over the next 50 years."
The rationale includes:
- Governments worldwide continue expanding debt and issuing massive amounts of currency for economic growth
- This trend will persist, accelerating inflation and causing currency devaluation alongside gold price appreciation
- Rising geopolitical risks, accelerating de-dollarization, and currency devaluation create multiple overlapping factors
Conclusion: A New Era for Precious Metals Investment
The 2024 record-breaking gold prices represent not merely a temporary spike but reflect fundamental global structural changes. Multiple factors—geopolitical risks, central bank actions, supply constraints, and institutional investor participation—have converged, ushering precious metals markets including gold into a new era.
Gold, platinum, and silver each possess distinct characteristics and demand drivers, increasing their importance as portfolio diversification tools for investors. Beyond 2026, these precious metals are expected to maintain upward price trends as both safe-haven assets and industrial materials.
However, investment decisions require careful consideration. Purchasing at high prices carries certain risks, so it's important to consult expert advice and approach investments from a long-term perspective.
Reactions in Japan
Gold over 24,000 yen is amazing. The necklace I inherited from my grandmother sold for way more than I expected. This might be the perfect time to sell.
The gold price surge reflects geopolitical risks. With global instability, flight to safe havens is natural. The rise will likely continue through 2026.
Gold is too expensive to buy now. Isn't this a bubble? I'd lose big if it crashes suddenly. Need to think carefully.
Many don't know silver and platinum performed better than gold. Should consider silver for diversification.
My old gold ring is now worth 15 times more. Grateful it can supplement my retirement funds. So glad I held it long-term.
The $5,000 gold prediction sounds exciting, but will it really go that high? Expert opinions vary, making it hard to judge.
The fact that central banks buy over 1,000 tons annually matters. With buyers representing 30% of demand, prices won't fall easily.
As long as yen weakness continues, domestic gold prices will keep rising. The exchange rate impact is bigger than I thought.
Silver demand growing from solar panels is a positive trend. Green energy and investment can align.
Wouldn't dividend stocks be better than gold that yields no interest? There are other inflation hedge options too.
Platinum faces EV-related demand concerns, but hydrogen fuel cells could reverse that. Taking a long-term view.
Too many flashpoints: Ukraine, Middle East, Taiwan. Gold has to rise in this situation. It's the classic safe haven.
Surprising that gold outperformed Bitcoin. Physical assets really are strong after all.
Keep 10% of my portfolio in gold. Pure insurance, but necessary in times like these. Hedges downside risk.
High gold prices make jewelry harder to sell. Prices are out of reach for average consumers. Tough for the industry.
Emerging market central banks shifting from dollars to gold signals a long-term trend change. Currency multipolarization is advancing.
Debating when to sell gold coins I inherited. Could go higher, but already high enough. Greed might backfire.
Supply constraints meeting demand increases is the current situation. Textbook price surge mechanism. But it can't last forever.
Institutional awareness of 'not holding risk' is significant. Gold investment might be the next trend after ESG.
Record highs sound like the top. There's a saying that when everyone wants to buy, it's time to sell. Thinking contrarian.
Japan's gold price surge is heavily influenced by yen weakness. In dollar terms, there's still a gap with international markets. Understanding currency factors is crucial.
Central bank gold buying is a global trend. The move away from dollar dependence will accelerate. Gold is becoming the new core reserve asset.
Interest in gold is rising in Europe too. Geopolitical tensions combined with economic uncertainty are driving a return to physical assets.
The $5,000 prediction seems too optimistic. Short-term corrections are inevitable. Need to be careful about buying at peaks.
Gold has traditionally been important in the Middle East. Recent price increases have further boosted individual holdings. Cultural demand also supports prices.
Chinese retail investors are also actively entering the gold market. Amid US-China tensions, gold is one of the safest options.
Latin America has strong silver production, and price increases benefit regional economies. Mining company stocks are also gaining attention.
Russia's central bank continues increasing gold reserves. As a countermeasure to Western sanctions, gold is strategically important.
Interesting that platinum prices are below gold. Historically it was reversed, but changes in industrial demand are affecting this.
Great opportunity for Canadian mining companies. Rising gold prices improve margins and will likely increase investment in new projects.
In India, gold demand surges during wedding season. Despite high prices, cultural importance sustains buying, though younger generations are considering alternatives.
Korean investors are also increasing gold ETF investments. Stock market volatility has emphasized portfolio diversification.
Brazil is a gold producer, but domestic demand is also rising. Gold investment is gaining attention as an inflation hedge.
Gold products are traditionally popular in Italy, but investment-purpose buying is increasing recently. European economic uncertainty is the backdrop.
Nordic countries have high environmental awareness, with concerns about mining-related environmental damage. Sustainable gold mining is being demanded.
Australia is a leading gold producer. Price surges are increasing economic contributions. The mining industry is booming.
Young investors in Spain are becoming interested in gold. Even the digital generation is rediscovering the value of physical assets.
In Saudi Arabia, there's a move to diversify some oil revenue into gold. Even resource-rich countries recognize gold's importance.
Poland's central bank is also increasing gold reserves. Interest in gold holdings is rising across Eastern Europe.
Dutch pension funds are also increasing gold allocations. Gold's role as a long-term inflation hedge is being reassessed.