Gold prices break records due to Trump and China influence

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Lerato Khumalo

In addition to the uncertainties caused by Donald Trump, who regained the presidency in the USA, the purchases of central banks increased the ounce price of gold to over 2 thousand 755 dollars again, bringing it close to the record level.

Gold, one of the safe haven assets, continues its upward trend due to geopolitical risks, increasing uncertainty and assessments that interest rates around the world will decrease due to concerns about stagnation in the economy.

While the ounce of gold, which started the first day of the new year at $2,620, has gained approximately $125 in value since the beginning of the year, the precious metal is approaching the record level of $2,790 in October 2024.

After the ounce price of gold rose to 2 thousand 758 dollars in the morning hours, it is at 2 thousand 754 dollars at 12.20 TSI, 0.36 percent above the previous closing.

Gold purchases by central banks and evaluations that central banks’ return from tight monetary policy will continue are also effective in this performance of gold.

Trump continued to threaten import tariffs on goods from other countries after taking office on January 20.

While these threats targeted Canada, Mexico and China, Trump also criticized the European Union’s trade surplus against the United States.

Analysts point out that in addition to geopolitical developments in the Middle East and Ukraine, the policies of the new Trump administration will also have a major impact on the gold price, and that many political decisions taken at Trump’s inauguration will further increase inflation and national debt in the United States. He noted that there were concerns.

Stating that private investors in India and China also purchased large amounts of gold due to the lack of other investment opportunities, analysts stated that India’s reduction of import taxes on gold led to an increase in the demand for gold.

According to some analysts, with decreasing confidence in the financial stability of the USA, many investors prefer to invest in gold rather than bonds.

Meanwhile, the Central Bank of China has purchased approximately 15 tons of gold since November 2024, and these purchases also support the ounce price of gold upwards.