The price of gold has reached a new record high as demand for the precious metal is high due to global economic uncertainty.
Namely, the new record price is 3,508 dollars (5,900 BAM) per ounce.
Gold is a safe-haven asset during economic uncertainty, and its price rose further earlier this year after US President Donald Trump changed tariff policies, disrupting global trade.
Analysts pointed out that the price rose due to the expectation that the Federal Reserve (Fed) of the United States of America, which has the role of a central bank, will lower the key interest rate, which makes it even more attractive to invest in gold.
Adrian Ash, CEO of bullion trading company BullionVault, told the BBC that the rise in gold prices in recent months is a result of Trump and what he has done in geopolitics and global trade.
“Last year’s US presidential election was really what started the fire,” Ash said.
Analysts are also concerned about the Fed’s independence as one of the factors affecting the price of gold. Namely, Trump has repeatedly verbally attacked Fed Chairman Jerome Powell, and recently tried to fire one of the Fed’s governors, Lisa Cook.
Derren Nathan from the financial company Hargreaves recalled that Trump’s attempts to threaten the Fed’s independence are what are driving interest in safe havens, including gold.
European Central Bank (ECB) President Christine Lagarde warned yesterday that if Trump undermines the Fed’s independence, it will be a serious threat to the global economy. According to her, if the Fed is forced to implement Trump’s policies, it will have a worrying impact on the economic stability of the United States, as well as the rest of the world.
Ash noted that the rise in the price of gold due to increased investor interest is usually offset by a decrease in gold purchases in China and India, the two largest gold jewelry markets in the world. However, this time, demand in these two countries is not decreasing as jewelry buyers are turning to buying investment gold, such as bars or coins.
