Gold price under pressure: Experts expect stabilization soon!

Gold price under pressure: Experts expect stabilization soon!

At the beginning of the week, the price of gold fell significantly. One reason for this is the agreement between the USA and China on a temporary tariff reduction, which led to a reduction in the price of a troy ounce of gold to 3,233 US dollars. This corresponds to a decrease of around 91 dollars compared to the previous days and in euros the price of gold fell to around 2,904 euros. However, experts are calm about the decline. Robert Rennie, commodities analyst at Westpac Banking Corporation, expects increased buying interest at prices around $3,200. Finanz.net reports that Gold hit a record high of $3,500 in mid-April, largely driven by concerns over US tariffs.

The development of the gold price is strongly linked to geopolitical risks, which create uncertainty in the markets. Historically, gold is considered a safe haven in uncertain times. Goldrechner24 explains that Geopolitical events such as wars, economic sanctions and political unrest affect the stability of markets and thus increase the demand for gold. This demand often correlates with increasing financial uncertainty, which either keeps the price of gold stable or even causes it to rise in times of crisis.

Influence of geopolitical events

Geopolitical events have a historical impact on the price of gold. For example, gold prices rose 25% during the 2008 financial crisis, while the Arab Spring saw a 30% increase between 2010 and 2012. Even after Brexit in 2016, there was a 20% increase in gold prices. Gold even reached a two-year high during the Ukraine crisis in 2022. These developments highlight gold's role as reassurance in times of economic instability.

Other key factors that influence gold prices during geopolitical crises include inflation, currency devaluation and interest rates. In times of uncertainty, investors look for stable alternatives, which drives demand for gold. Low interest rates also increase the attractiveness of gold as a form of investment. A potential rise in geopolitical tensions could cause gold prices to continue rising, while possible economic recoveries could cause a decline.

Long-term market developments

Experts agree that gold remains an important indicator of confidence in the stability of markets and governments. Despite the recent decline, interest in gold as an investment remains, especially given ongoing geopolitical risks and central bank demand. These factors support the long-term upward trend in gold prices and could lead to stabilization in the near future.