Gold prices have surged to an all-time high, driven by trade war fears and rising demand for safe-haven assets. According to ING commodity analysts Warren Patterson and Ewa Manthey, these factors are fueling gold’s upward momentum.
Trade War Concerns Boost Gold Prices
Uncertainty surrounding global trade tensions has significantly impacted gold prices. The ongoing trade war risks higher inflation and slower economic growth. This has led investors to flock to gold as a reliable safe-haven asset.
President Trump’s recent comments about the US taking over the Gaza Strip have added to the bullish trend. Such geopolitical tensions often push investors toward gold, further driving its price upward.
Central Banks’ Gold Buying Spree
Central banks are consistently boosting their holdings of gold reserves. Last year, their purchases exceeded 1,000 tonnes for the third consecutive year. The World Gold Council reported a sharp rise in the fourth quarter, with 333 tonnes added.
The National Bank of Poland was a major contributor, adding 90 tonnes to its reserves. Emerging market banks also showed strong demand, reflecting gold’s growing importance in global financial systems.
Gold’s Performance in 2024
Gold has already gained over 9% this year, reaching a series of record highs. The combination of trade tensions, geopolitical risks, and central bank demand has created a perfect storm for gold’s rally.
More investors are turning to gold as a protective measure against economic instability. This trend is likely to continue as global markets remain volatile.
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