Gold breaks $3,000 amid Donald Trump’s commerce wars – DW – 03/14/2025 | EUROtoday

Gold has surpassed one other historic milestone on Friday (March 14), breaking by way of the psychologically vital barrier of $3,000 (€2,750) per troy ounce (31.1 grams) for the primary time in historical past. Since the start of the 12 months, gold costs have climbed greater than 13%.

The underlying cause for gold’s all-time excessive is a basic uncertainty about financial outlooks, inflicting many individuals to worry for his or her cash and search crisis-proof investments. Gold retains its worth no matter inflation ranges, stays safe throughout foreign money reforms, and is proof against change fee fluctuations.

London is essentially the most influential marketplace for spot gold buying and selling, as it’s residence to the London Bullion Market Association (LBMA), which has been setting the worldwide benchmark value for gold buying and selling since 1919. Other, barely much less vital buying and selling hubs embrace China, India, the Middle East, and the United States.

Trump’s tariff coverage weighs on sentiment

For Frank Schallenberger, a commodities analyst at Germany’s Landesbank Baden-Württemberg (LBBW), the first cause for the present rally in gold is the tariff coverage pursued by US President Donald Trump.

“It is causing uncertainty in financial markets, making gold, once again, a safe-haven asset,” he informed DW.

Another commodities analyst, Carsten Fritsch from German lender Commerzbank, shares the identical view in a press release to DW.

“The biggest driver of the strong rise in gold prices is the uncertainty surrounding US President Donald Trump’s tariff policies,” he stated, including that the standard elements influencing the value of gold, such because the US greenback and rate of interest expectations, are “not playing a significant role in the current price surge.”

Social media spawning disaster fears

Fears of a worldwide financial downturn are additionally fueled by speculative claims — some much less credible than others. On numerous on-line platforms, predictions by American businessman and bestselling writer Robert Kiyosaki are circulating. He predicted already a decade in the past {that a} “massive economic crisis” is anticipated in 2025. He advises folks to deal with “self-sufficiency and entrepreneurship” and to speculate primarily in “gold, silver, and bitcoin.”

Meanwhile, economists at US funding financial institution Goldman Sachs have taken a extra sober take a look at the scenario, pointing to the position of central banks world wide in pushing up the gold value.

Gold buying and selling sometimes follows rates of interest, and in occasions of low charges, investing in valuable metals turns into significantly enticing, they stated in a word to buyers.

Central banks on a gold shopping for spree

Gold has many patrons — non-public people looking for to safeguard their wealth, institutional buyers on the lookout for options amid dwindling returns, and even nationwide economies.

According to Commerzbank analyst Fritsch, central banks may have contributed to the value surge “through large-scale gold purchases.”

One widespread cause central banks purchase gold is to hedge in opposition to the danger of monetary sanctions — one thing significantly related for rising economies. These international locations fear about being disproportionately affected by disruptions in world commerce or getting caught in conflicts between main financial powers.

Goldman Sachs Research has reported that gold purchases in these nations have elevated considerably since Western nations imposed sanctions on Russia within the wake of Moscow’s invasion of Ukraine.

When will the gold rally finish?

The World Gold Council (WGC), an trade group representing gold mining firms, stays cautiously optimistic in regards to the gold value within the close to time period.

“We expect central banks to continue playing a key role in 2025, with more investors entering exchange-traded gold funds,” WGC skilled Louise Street informed Manager Magazin. However, she additionally famous that “weakness in the jewelry sector is likely to persist, as high gold prices and slow economic growth reduce consumer purchasing power.”

For LBBW’s Frank Schallenberger, an finish to the gold rally might already be in sight, as he predicts buyers will promote and take income anytime quickly. “Later in the year, weak jewelry demand, a slight decline in coin and bullion sales, and reduced gold purchases by central banks are likely to push prices down again.”

Carsten Fritsch at Commerzbank additionally sees indicators of a slowdown coming. “Gold demand in China and India will likely weaken due to the recent surge in prices and record-high price levels,” he stated.

Furthermore, as the present cycle of rate of interest cuts by key central banks such because the ECB in Europe or the US Fed is nearing its finish, “gold’s key support factors may soon disappear” amid steady or rising charges.

This article was initially written in German.