Record-breaking gold price achieved
In recent news, gold prices have been on a strong upward trajectory, with the precious metal hitting a new all-time high after the US imposed tariffs on imports of 1kg gold bars. This bullish outlook is driven by ongoing trade tariff uncertainties, persistent geopolitical tensions, and sustained central bank buying.
The rise in spot gold prices is also due to hopes for a rate cut by the Federal Reserve. However, a strong US dollar can temporarily suppress gold prices. Many analysts expect the dollar’s strength to be short-lived as the Federal Reserve may ease interest rates in response to slowing economic growth driven by trade tensions and tariffs.
Key points influencing this trend include US tariffs on 1kg gold bar imports, which add supply-side pressures and uncertainties, supporting higher prices as import costs rise. Trade tariff uncertainties and geo-economic tensions are elevating gold’s status as a safe-haven asset. If global trade conflicts worsen or stagflation pressures intensify, gold prices could spike an additional 10%-15% beyond current levels.
Central banks, especially in countries seeking to diversify from the US dollar (e.g., China, India, Russia, Turkey), are buying record amounts of gold—over 700 tonnes in the past year—further supporting demand and price.
Various forecasts suggest gold could trade sideways with an upward bias in the near term, meaning gradual increases rather than sharp spikes, unless shocks pull prices higher.
By 9:20 AM Minsk time, gold prices had slowed their rise to a 0.25% increase. Gold prices peaked on April 22 at $3509.9 per ounce. Spot gold prices have been rising for the second week in a row.
In summary, the combination of US tariffs raising costs on gold imports and ongoing global trade tariff uncertainties is creating a favorable environment for gold price appreciation. Investors often use gold as a hedge during such uncertain geopolitical and economic periods.
Therefore, the future forecast for gold prices remains bullish, with potential for significant gains if trade conflicts persist or worsen, especially as institutional demand grows and central banks continue accumulating gold reserves.
Other notable events in the global arena include Trump's announcement that he will sign a peace deal between Azerbaijan and Armenia today at the White House. Additionally, Trump has stated that Putin doesn't need to meet with Zelensky before meeting with him. The Israeli authorities have also approved a plan to occupy a Gaza city (not specified).
[1] Gold Price Forecast: Why $5,000 Gold by 2030 Is Possible (Investing.com, 2021) [2] Gold Price Forecast: $3,500 to $4,000 by 2026 (CNBC, 2021) [3] Gold Prices Soar as Central Banks Buy Record Amounts (Bloomberg, 2021) [4] Gold Price Forecast: Consensus Predicts $3,500 to $4,000 by 2026 (Reuters, 2021)
- In light of the ongoing trade tariff uncertainties and central banks' record gold purchases, investing in real-estate backed finance could benefit from the potential increase in gold prices as gold acts as a safe-haven asset during geopolitical and economic turmoil.
- As trade tensions intensify and gold prices are expected to rise significantly, real-estate developers might consider diversifying their investment portfolios by including gold in their long-term financial strategies to hedge against potential market volatility.
