In times of economic uncertainty, investors are increasingly turning to gold and increasing demand has driven up the price of the precious metal in recent months. But the coming to power of Donald Trump in the US, together with other political events, also has an impact on the gold price.
The gold price is on track to hit its all-time high before the weekend. The troy ounce (approximately 31.1 grams) cost $2,785 on Friday, compared to $2,782 (2,674 euros) in the morning. This meant that it was only a few dollars off the all-time high of $2,790 in October.
Trump’s trade policy as a price driver
Gold has been in a stronger uptrend since the beginning of the year. The latest driver is the uncertainty surrounding the geopolitics and trade policies of the new US administration under President Donald Trump. This continues to threaten other countries with high tariffs on goods they export to the US.
Confidence in financial stability in the US is declining
“In addition to the geopolitical developments in the Middle East and Ukraine, the policies of the new Trump administration will have an impact on the gold price,” market expert Andrea Greisel from Fürst Fugger Privatbank explained a few days ago. There are concerns that the numerous political decisions surrounding the inauguration will further increase inflation and national debt in the US. According to Greisel, confidence in US financial stability is declining and many investors would rather bet on gold than on bonds.
Commerzbank’s precious metals experts recently highlighted another aspect. In addition to the uncertainty about Trump’s first measures, the announced tariffs on goods from Canada and Mexico will also likely have a direct impact on the gold price. According to the World Gold Council, Canada is the fourth largest producer of gold, which is mined in gold mines.
Moreover, according to experts, central banks are buying gold. “The strength of the gold price in recent weeks also reflects, among other things, the Chinese central bank’s renewed gold purchases since November,” Dekabank experts said recently.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
