Why do investors vigorously accept gold when economic conditions are difficult? With valuable metal prices reaching record levels, the reason for remaining a reliable investment haven.
The commercial turmoil that resulted from exorbitant customs duties imposed by US President Donald Trump has led to a record rise in gold prices, which is widely seen as a safe investment sanctuary.
The precious metal, “Friday”, has ever recorded its highest level in trading, reaching $ 3227.51, and since the beginning of the year, he achieved gains that exceeded 20 percent.
The chief mineral affairs expert on the trading platform “Kennisis Mane” Frank Watson “says the precious metal alloys are still exempt from American customs customs, which may be due to not being considered basic industrial products.
Trump’s identities aim to support US production and reduce the deficit in the trade balance of the United States, which will not be achieved by tax fees on gold.
After gold prices rise to record levels in early April when Trump launched his mutual acquaintances, metal investors have sold the necessary liquidity in the midst of the stock exchange deterioration.
This is the weakest gold for a short time, and he returned to jump. Since you did not record the prices of the metal, no decline with Trump’s declaration suddenly the suspension of American drawings on dozens of the country, in a move from which China excluded.
The dollar fell, the US currency fell strongly against its competitions after Trump imposed its fees, which strengthened the attractiveness of gold.
Watson says gold is “one of the important assets for managing risks that entities maintained such as central banks, financial institutions and individual investors.”
The markets are concerned about what a comprehensive trade war might carry the repercussions of growth, and is betting on the declaration of the Federal Reserve, “the US Central Bank”, an additional reduction in the interest rates to support the activities of the largest economy in the world.
This is despite the fact that the fees may lead to a new rise in inflation, which would usually push central banks to raise interest rates.
Such expectations for borrowing costs increase, pressure on the dollar, as well as on US government bonds that have begun to lose some of the gravity they enjoy as a safe haven.
A rare and concrete origin enhances the gains of gold is that it is rare and materialistic. While the majority of people will not have a gold bond, they can acquire golden jewelry.
“People want a tangible origin that they can acquire,” says John Ridel’s strategies at the World Gold Council.
Ridel explains that gold has proven that it is one of the assets that investors and those who are savings seek to acquire when losing confidence in governments and banks, even if their investment in itself does not return to them with profits or benefits.
Watson notes that “gold is very rare (metal) and does not erode,” which makes it the highest value in terms of long -term storage.
Central banks’ endeavors are the gold of the assets that central banks seek, which contributes to its high prices as a result of filling the cabinets with alloys in a way that crises, and in the stability of currency rates and its use as a guarantee of loans and transactions.
In the year 2024, central banks around the world strengthened their gold reserves with more than a thousand tons for the third year in a row, according to the World Gold Council.
According to Charlie Morris, an analyst at the investment research group “byte Tree”, “this step was due to the invasion of Ukraine and the subsequent confiscation of Russian reserves.”
After the start of the war in Ukraine in February 2022, foreign currency reserves owned by the Russian Central outside Russia were frozen under international sanctions.
The war in Ukraine exacerbated and then the conflict in Gaza, if there is no certainty at the geopolitical level, increased the attractiveness of gold.
