The price of gold is hovering around record levels and has exploded in value over the past year or so as the economy faces uncertainty.

As of Friday, gold was selling for about $3,680 per ounce. That represents an 8.3% increase from just a month ago, a 25% increase from six months ago, and a strong 38% growth in value from the start of the year.

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Compare that to the stock market, the S&P 500 has notched gains of about 12% since the start of the year, the tech-heavy Nasdaq is up nearly 15%, and the Dow Jones Industrial Average has grown 8% in that same time period.

There are a variety of factors at play as to why gold prices might have risen so much, but a key one is that gold is and has long been seen as a safe-haven asset. Investors might invest in gold if they are concerned about geopolitical or economic risks.

Desmond Lachman, a senior fellow at the American Enterprise Institute, told the Washington Examiner that the upward trend in gold prices is “not a good sign.”

“Because what it’s telling you is people don’t like what they’re seeing in the United States, and they’re getting out of dollars and putting their money into gold,” Lachman said.

There is also a lot of uncertainty about the economy right now. President Donald Trump has levied a historic tranche of tariffs on allies and adversaries alike, geopolitical stability remains upended in Ukraine and the Middle East, and domestically, there are indications that the labor market might be flagging, and speculation of an economic downturn continues to grow.

On the domestic economic side, inflation is still above the Federal Reserve’s 2% target, and there has been some unwelcome job data recently.

Inflation, tracked by the consumer price index, rose to 2.9% in August.

The economy added just 22,000 jobs in August, and the unemployment rate rose to 4.3%. Also, the July jobs report revealed that some 258,000 fewer jobs were added in May and June than previously reported. 

Additionally, the government announced that labor market growth for the 12 months ending in March was 911,000 jobs fewer than previously reported.

And despite things like gross domestic product, a broad measure of economic output, still expanding, sentiment toward the economy has soured. As of Friday, consumer sentiment has fallen 21% over the past year, according to a preliminary reading of the University of Michigan Consumer Sentiment Index for September

Jai Kedia, an economist at the Cato Institute, emphasized that general uncertainty plays a major role in this.

“I think what the current prices are actually reflecting is more uncertainty about the future than people sort of projecting that there might be bad economic data in the future and changing their behavior now, Kedia told the Washington Examiner.

James Rickards, a lawyer, investment banker, and expert on precious metals, told the Washington Examiner that global gold output is also another factor pushing up prices of the precious metal.

He pointed out that global mining output of gold has been relatively flat for the past seven or so years, and is roughly hovering at about 4,000 metric tons of gold per year. At the same time, demand for gold has increased — a scenario that is good for price growth.

“So this is economics 101, when you have flat supply and rising demand, the price goes up,” Rickards said.

Some people also argue that gold is an inflation hedge, but Rickards rather categorizes gold as an “everything hedge.”

“Uncertainty, political unrest, social unrest, war, natural disaster,” he said.

There is also demand for gold from other countries. Campbell Harvey, a professor at Duke University’s Fuqua School of Business, told the Washington Examiner that there is demand for gold from central banks of countries that are trying to de-dollarize.

Rickards pointed out that central banks have, somewhat recently, become net buyers of gold — something that is a fairly new phenomenon. From 1970 to about 2010, they were net sellers of gold, Rickards said.

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It is incredibly uncertain what might happen in the coming months and years with the economy and with geopolitical events, although Lachman said he expects that the gold rally could continue, even though it might not be a good sign.

“I think gold is on a tear,” Lachman said. “You know, my view is that it will continue to be because things are so uncertain and so unsettled.