Why has gold got so expensive?

SPEAKER_1 (0:00)

Hello, welcome to 6 Minute English from BBC Learning English. I'm Phil.

Georgina Jackson (0:05)

And I'm Georgie. Did you know that you can now watch a video version of this podcast with subtitles? You can find it at bbclearningenglish.com.

SPEAKER_1 (0:17)

Hi, Georgie. I've got a question for you.

Do you own anything made of gold?

Georgina Jackson (0:23)

Well, at the moment, I'm wearing a lot of gold-colored jewelry, but I'm not sure exactly how much of it is made of gold.

SPEAKER_1 (0:32)

I don't think I own anything made of gold. Beyond jewelry and other personal items, gold is bought and sold by investors and banks. The price of gold has always gone up and down, but in 2026, it reached its highest ever price. In this episode of 6 Minute English, we'll be talking about how gold became a valuable investment and asking the question, why do people buy gold?

Let's start with our quiz question, Georgie.

Gold is a metal that's extracted or dug up from under the ground in mines. But how much gold has been extracted from the earth? Is it A, over 50,000 tonnes, B, over 100,000 tonnes, or C, over 200,000 tonnes?

Georgina Jackson (1:29)

Phil, I have absolutely no idea, but I'm going to go with C, 200,000 tonnes.

SPEAKER_1 (1:34)

Okay. Well, we'll give you the answer at the end of the programme.

Georgina Jackson (1:38)

Okay, Phil. So we've been using gold for thousands of years. But why and how did it start?

SPEAKER_1 (1:45)

Well, before money was paper or plastic or just numbers in your bank account, a lot of it was actually gold. And experts have discovered gold in coins that are thought to be made in the 6th century BC.

So gold coins were made and they were used because the metal was much easier to carry and trade than things like cattle or timber.

Georgina Jackson (2:08)

Okay, but now our money isn't literally made of gold. So why is gold valuable?

SPEAKER_1 (2:14)

It's a good question, but even though it isn't money, gold is still a financial asset and an asset is something valuable that can be sold for money.

People buy gold in times of crisis because it's thought of as a safe investment. Let's listen to expert Suki Cooper explaining more to the BBC World Service.

Suki Cooper (2:36)

Gold is a safe haven because it's not connected to one particular government or one particular economy or one particular market. The fact that it's neutral means it's an asset that's perceived to be a store of value over a longer term.

SPEAKER_1 (2:49)

Suki describes gold as a safe haven, and a safe haven means something or somewhere that's protected from harm or danger, or in financial terms, from a fall in value.

Georgina Jackson (3:01)

Yes. Suki explains that unlike dollars or pounds, for example, gold is not connected to a particular country. It's neutral.

SPEAKER_1 (3:10)

And Georgie, because we get gold from mines, there's more or less a fixed amount. Unlike paper money, you can't just print more, as Catherine Schenck, Professor of Economic and Social History, explains.

Catherine Schenck (3:23)

It can't be created and fabricated out of thin air through alchemy. And so this sort of controls the supply and sustains an underlying value behind the demand for gold.

Georgina Jackson (3:33)

Catherine explains that gold can't be created out of thin air, an expression meaning making something from nothing.

SPEAKER_1 (3:40)

As Catherine says, we don't make gold through alchemy.

Alchemy is an ancient kind of chemistry that attempted to do impossible things, like turn ordinary metals into gold. And because we can't just magically make more gold, when lots of people want to buy gold, the price increases.

Georgina Jackson (4:01)

OK, understood. Now Phil, at the start of this programme, you said that gold prices hit an all-time high in early 2026

So what's going on?

SPEAKER_1 (4:12)

Well we mentioned that the price of gold increases in times of crisis because government banks want to buy more of it. And there has been a series of world events that have made government banks want to buy more gold. For example, the wars in Ukraine and the Middle East and in politics too. For example, the US imposing tariffs on international products.

But since that peak in January, the price has dropped a bit.

Georgina Jackson (4:39)

OK. And does the fall in the price of gold mean that people won't want to invest in it in the future?

SPEAKER_1 (4:45)

No. It's likely that the price will go up again.

Experts believe that gold will always be an attractive investment during uncertain times. Let's hear from market strategist John Reid.