Gold price hits record high as investors seek safety

Gold has always been seen as a valuable and safe investment, but recently its price has reached a record high. On Tuesday, the spot price of gold climbed to $3,508. 50 per ounce, continuing a strong upward trend that has seen its value increase by nearly a third since the beginning of the year. This surge in gold prices is happening because many investors are worried about the global economy and are looking for safer places to put their money. Gold is often considered a 'safe haven' asset, which means people buy it when they are unsure about the future of the economy or when there are big changes in world politics.

One of the main reasons for the rise in gold prices is the uncertainty caused by new trade policies. Earlier this year, US President Donald Trump announced new tariffs that have made global trade more difficult. These tariffs have led to concerns about the stability of the world economy, and as a result, more people have started buying gold. Adrian Ash, who is the director of research at BullionVault, explained that Trump's actions in global politics and trade have played a big role in pushing gold prices higher. He also mentioned that last year's US election made investors more interested in gold. Another factor is the independence of the US central bank, known as the Federal Reserve. Trump has criticized the bank and even tried to remove one of its governors, which has made investors nervous and increased their interest in gold.

Christine Lagarde, the head of the European Central Bank, warned that if Trump continues to challenge the independence of the Federal Reserve, it could be very dangerous for the global economy. She said that if the Federal Reserve has to respond to political pressure, it could make the US and world economies unstable. Normally, when gold prices go up, buyers in China and India slow down their purchases of gold jewelry. However, this time, people in those countries are still buying gold, but they are choosing investment products like gold bars and coins instead of jewelry. Other reasons for the rise in gold prices include Russia's invasion of Ukraine, which has added to political uncertainty, and changes in trade policies that have affected inflation and supply chains. Suki Cooper, a precious metals analyst, said that gold has also benefited from a weaker US dollar earlier in the year, making it an even more attractive option for investors. All these factors have combined to make gold one of the most popular investments in 2024.