Gold set a historic record: how it will affect the global economy
14 March 19:37
on March 14, 2025, the price of gold exceeded $3,000 per troy ounce for the first time in history, setting an all-time record on world markets. This was the result of global economic and geopolitical uncertainty, which prompted investors to seek safe assets, "Komersant Ukrainian" reports citing Reuters.
The main factors that caused the rise in gold prices are as follows:
1. Geopolitical tensions and trade conflicts. Recent statements by US President Donald Trump regarding the possibility of imposing new tariffs on European goods have caused serious concern in global markets. In addition, the escalation of the trade war between the US and the EU has forced investors to abandon risky assets such as equities in favor of gold. After all, gold is traditionally perceived as a “safe haven” during economic and political turmoil. In addition, tensions between China and Taiwan and instability in the Middle East have led to increased demand for gold among central banks and large investors.
2. Inflationary risks and the US Federal Reserve’s monetary policy. Gold is a classic hedge against inflation 1 and its price rises when the economy faces a depreciation of money.
In addition, there are ongoing discussions in the US and Europe about the possibility of lowering interest rates, which weakens the dollar and makes gold more attractive.
Central banks in various countries, including China, are actively increasing their gold reserves in an effort to reduce their dependence on the US dollar.
Rising government debt in the US and other countries is also driving demand for gold as a safe-haven asset.
3. Weakening stock markets. Recent months have been volatile for stock markets, with the S&P 500 2 has lost 10% of its peak value. Investors who had previously invested in high-yielding stocks have begun to reorient their assets to gold.
Analysts say that if stock markets continue to fall, the price of gold could rise even further.
How are markets reacting to the record gold price?
Demand for gold from central banks
China, India, Turkey, and other countries continue to build up gold reserves to diversify their foreign exchange reserves. Central banks use gold as a strategic asset to reduce risks in the event of further destabilization of the financial system.
Gold futures market
Gold futures contracts for April delivery have already exceeded $3,000, indicating expectations of further growth. Some investors see gold as an alternative to bitcoin, which has experienced high volatility.
Will gold rise further? Economists have made a forecast
Experts predict further growth in the price of gold if current economic conditions do not change.
If geopolitical tensions increase, gold could rise to $3,500 per ounce. If the US Federal Reserve cuts rates, it will further increase interest in gold as an alternative investment vehicle.
At the same time, some analysts believe that if the markets stabilize, the gold price may undergo a correction.
Читайте нас у Telegram: головні новини коротко
