The price of gold currently only seems to be heading in one direction: up. There is no end to the rally in sight. One of the reasons for this is Donald Trump.
Anyone who wants to buy gold currently has to do so pay a lot of money. One troy ounce currently costs $2,285, which is just below the record price recently reached. Since the beginning of the year, the price has risen by almost 11 percent, and the increase is almost 40 percent from the low reached in 2022.
Market observers cite various reasons for the record hunt. On the one hand, they point out that the US Federal Reserve has announced a change in monetary policy and will probably cut interest rates in three steps this year. The European Central Bank (ECB) will also probably cut key interest rates this year. This prospect makes gold, which does not pay interest, more attractive compared to other investments. This is currently increasing because bond yields are falling.
On the other hand, the reason given is that geopolitical risks are supporting the gold price, including the war in Ukraine and the Gaza Strip. In addition, there are threats from the leadership in Beijing towards Taiwan. The possible return of Donald Trump to the White House is also causing unrest.
Central banks from emerging countries are also contributing to the rising gold price. They have been buying the precious metal more and more for months. The central banks are “preparing for a multipolar world in which the dollar no longer plays such a dominant role as the reserve currency,” said market strategist John Reade in an interview with “Capital”. Because no other currency is yet strong enough to compete with the dollar, they would temporarily park their capital in gold.
Despite all the reasons given for the sharp increase in the price of gold, it is not just the price of gold that is currently going through the roof. Many assets are rallying in the markets: including stocks, bonds and Bitcoin. Investors drive up the price of pretty much everything – that’s why gold’s record hunt is only logical.