Gold: The Shine of Investment and the Secrets Behind Price Rises
Gold is one of the oldest and most important metals ever used by humans for trade and wealth preservation. Over time, gold has become a safe haven for investors, especially during times of economic and political turmoil. In this article, we will explore the latest gold prices and delve into the key factors, particularly geopolitical ones, that influence its movements.
Current Gold Prices
As of Thursday, February 20, 2025, gold prices have experienced a noticeable increase in global markets. The price of one ounce (31.1 grams) reached around $2,954.23 in spot trading, representing an increase of approximately 13% since the beginning of the year. This rise reflects growing demand for gold as a safe haven amid global economic and political tensions.
Key Factors Affecting Gold Prices
Gold prices are influenced by several economic and political factors, the most important of which are:
- Inflation: Gold is considered a hedge against inflation. When inflation rates rise, the purchasing power of currencies decreases, prompting investors to turn to gold to preserve the value of their money.
- Interest Rates: Central bank decisions regarding interest rates affect gold’s attractiveness. When interest rates rise, investors tend to favor assets that generate returns, which may reduce demand for gold. Conversely, lower interest rates increase the appeal of gold investments.
- Geopolitical Tensions: Political events and international conflicts create uncertainty in the markets, causing investors to seek safe-haven assets like gold.
- US Dollar Value: There is an inverse relationship between the value of the US dollar and the price of gold. When the dollar declines, gold becomes cheaper for investors in other currencies, leading to increased demand and higher prices.
- Supply and Demand: The amounts of gold being produced and mined, along with demand from industries and jewelry, play a significant role in balancing supply and demand, thereby impacting gold prices.
Geopolitical Influences and President Trump’s Decisions
Recently, geopolitical tensions and decisions by US President Donald Trump have played a prominent role in the rise of gold prices. Since taking office, Trump has made several decisions that have created uncertainty in global markets, pushing investors towards gold as a safe haven.
- Trade Wars and Tariffs: Trump imposed tariffs of 10% on Chinese imports and 25% on steel and aluminum imports. He also announced plans to impose tariffs on other products like lumber, cars, semiconductors, and pharmaceuticals. These policies raised concerns about the potential for global trade wars and rising inflation, further enhancing gold’s appeal as a hedge.
- International Political Tensions: Trump’s harsh statements towards leaders of other countries, such as calling Ukrainian President Volodymyr Zelensky “a dictator,” escalated geopolitical tensions. These turbulent political climates encouraged investors to seek safe assets, contributing to higher gold prices.
- Dollar Policies and Inflation: Additionally, there has been speculation about the possibility of reassessing US gold reserves to strengthen the treasury and reduce the need for bond issuance. Such a move could lead to increased market liquidity and higher inflation rates, driving investors toward gold as a protective measure.
Tips for Investors and Traders
- Monitor Economic and Geopolitical News: Staying updated on central bank decisions, government policies, and political developments can help predict gold price movements.
- Diversify Your Investment Portfolio: It is important not to rely solely on gold but to spread investments across different assets to reduce risks.
- Understand Your Investment Goals: Determine whether your goal for investing in gold is to hedge against risks, achieve short-term profits, or preserve wealth for the long term.
Conclusion
Gold remains one of the most important assets in the investment world, with its prices affected by various factors, especially geopolitical and economic ones. Therefore, understanding these factors and staying informed about global developments is crucial for investors and traders to make well-informed decisions.
