Surging global demand for gold a sign global resilience may not last – IMF Managing Director

Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva on Wednesday underscored that exceptionally high economic uncertainty across the globe continues to climb, pointing to the current rising gold prices as being indicative of investor anxiety and risk aversion.

Among measures discussed to withstand any future downfall, Georgieva called for heightened focus on the private sector all across the world, with the need for resilient private sector adaptability.
“Durably lifting growth requires above all higher private sector productivity; and for this, Governments must provide and protect the basic building blocks of free markets, including property rights, rule of law, good data, effective bankruptcy codes, strong financial sector oversight and independent yet accountable institutions. In too many economies, private sector productivity is tangled up in red tape. Competition is key, and regulation must not tolerate or create unfair advantage,” she noted.
“We have seen the public sector moving out from where it doesn’t belong from the economy and the private sector stepping forward, and that is benefiting the world more at the time of more turbulence. Just look at private initiatives in world trade companies.”
Her address comes just as gold prices surged to a record high of over US$4000 per ounce, a sign that investors are seeking safe havens amid rising global economic and political uncertainty.

“Buckle up”
Speaking at the 2025 Annual Meetings at the Milken Institute, Georgieva noted that notwithstanding the global economy continuing to fare better than expected, it is still faring worse than what is needed, which is fuelling the uncertainty and anxiety among investors.
“Buckle up; uncertainty is the new normal; it is here to stay,” she warned.
She credited the better-than-expected outcome to improved policy fundamentals, private sector adaptability, less severe tariff outcomes than initially feared and supportive financial conditions.
However, she expressed concerns that this improved outcome may not last.
“Global resilience has not yet been fully tested. And there are some warning signs that the test may come. Just look at the surging global demand for gold. Spurred by evaluation effects and net purchases partly reflecting geopolitical factors,” she noted.
“Holdings of monetary gold now exceed 1/5 of the world’s official reserves. The full effect is still to unfold.”
According to Georgieva, global coordination in many parts of the world and sustained efforts have delivered more credible monetary policy. She noted that many emerging economies in particular have significantly upgraded their policy, frameworks and institutions.
“These economies now perform better when shocks strike than before the global financial crisis. Good policy makes a difference,” she said.
She called on the global economies to ride the wave of the current opportunistic environment to avoid any impending falls.
“In a multipolar world of rapid change, it is paramount that policymakers do much more to capture the opportunity so they can meet the aspirations of their citizens, especially young people,” she said.
Georgieva’s speech comes days before the IMF and World Bank hold their annual meetings next week in Washington, DC.
“This is a time of intense engagements, and the most pressing questions will be about the global economic impact of these forces of transformation and the policy turbulence we are experiencing today. How is the world economy coping? Better than feared but worse than we need,” she noted.
“In April, many experts, not us, predicted a United States (US) recession in the near term with a negative spill-over to the rest of the world. Instead, the US economy, as well as many other advanced and emerging markets, and some developing countries have held up, as our world economic outlook will explain next week.”