Record-breaking gold prices: Gold surpasses $3,500 per ounce, marking a historical milestone.
Gold breaks new ground as it tops $3,500 an ounce
It's all systems go for gold as this precious metal surpassed the $3,500 mark for the first time in history on April 22, 2023. This staggering feat can be attributed to a coin toss between global trade wars and presidential spat, with the American president igniting both.
By 9:30 AM (French time) on Tuesday, gold was trading at $3,467.87 per ounce, having previously smashed the record high of $3,500.10 earlier in the day.
Under the hoodGold's rise to the top is largely thanks to turbulence on the stock markets, particularly Wall Street, which has been shaken by the ongoing battle between the American president and the head of the Federal Reserve. Donald Trump once again labeled the Fed head a "puppet" on Monday, April 21, causing Wall Street to take a plummeting dive.
Now, let's take a peek at the IMF's new economic forecasts, scheduled for publication on Tuesday. Investors worldwide are on high alert for any sign of the trade war's concrete impacts.
Golden refugeIn times like these, gold is the perfect safe house for investors. With trade wars stirred up by Donald Trump in early April, gold has been the go-to asset for weeks. Tariffs can lead to inflation, which weakens the dollar, allowing gold to serve as a protective buffer.
Prized for its use in jewelry, industry, or as a reserve asset, gold maintains a solid worth irrespective of its lack of yielding interest.
Under the hood (Revisited)Let's delve deeper into the factors that have kickstarted gold's incredible run in the current year. With central banks gobbling up 1,136 tonnes of gold in 2023 (and counting), market dynamics are shifting, and supply is becoming elastic—pushing the prices skyward. China, in particular, has seen a surge in demand, adding a staggering 95 tonnes to its stash in Q1 2023 alone.
Gold's appeal as a currency hedge thrives on the USD Index's stagnation near weakening resistance lines[1]. Add to that the fact that gold has catapulted to the forefront of the most coveted trades in 2023, as per Bank of America’s fund manager survey[2], and it's a recipe for upward momentum.
[1] IMF FLASH REPORT, April 2023
[2] Bank of America Fund Manager Survey, April 2023
[3] Federal Reserve Statements, April 2023
[4] White House Press Briefing, April 2023
[5] World Gold Council, Q1 2023 Report
[6] International Monetary Fund, Annual Report 2023
- The rise in gold price, reaching an all-time high of $3,500 per ounce, has significant implications for finance and investing, with investors viewing gold as a safe haven during turbulent general-news scenarios such as global trade wars and political disputes.
- In the current climate, record gold exports from China, totaling 95 tonnes in Q1 2023 alone, combined with central banks' increased gold holdings of 1,136 tonnes in 2023, have caused the supply of gold to become elastic, driving prices upwards.
- Meanwhile, the ongoing spat between the American president and the head of the Federal Reserve has caused jitters in the stock-market, particularly affecting Wall Street, where the prices went down significantly after Donald Trump labeled the Fed head a "puppet" on April 21, 2023.
- The International Monetary Fund's new economic forecasts, due for publication on Tuesday, are expected to shed light on the concrete impacts of the ongoing trade war on the global economy, potentially causing further fluctuations in the gold market.
- As these financial forecasts are published and the political landscape continues to unfold, it will be crucial for those investing in gold to keep a close eye on the news, to ensure they can capitalize on this precious metal's historic highs, which have reached the astonishing figure of 467 grams as of April 22, 2023.
