Gold is gaining primarily due to the uncertainty that has persisted in the markets for a long time. Its price is expected to approach $3,100 per ounce this year.
The minimum price of gold over the past three months has been $2,599 per ounce, while the maximum reached $2,969 (on February 25). Breaking the $3,000 barrier is very close. Over the past month, nothing has changed that would convince Donald Trump not to impose significant trade tariffs on neighboring countries. According to published regulations and Trump’s announcements, tariffs of 25% on Mexico and Canada, along with an additional 10% on China, have become a reality.
“Uncertainty has dominated the markets for a long time, and now this uncertainty is being fueled by D. Trump. Investors are increasingly concerned about whether the growth on Wall Street and European stock exchanges will continue. In such a situation, gold has become the preferred asset for investors,” said Michał Stajniak, Deputy Director of the Analysis Department at XTB, in an interview with MarketNews24. “The price of gold is also rising alongside falling real estate prices in China, making it an increasingly attractive asset for Chinese investors.”
This uncertainty is influencing interest rate cuts, as well as further decisions by the Fed and the ECB. In Poland, it has been over a year since the last interest rate cut. Central bank interest rate cuts will favor the rise in gold prices.
Central banks are buying gold because they are uncertain about what will happen with other assets. Their uncertainty is tied to the future of the U.S. dollar, as the U.S. debt is growing at a record pace.
“For three years, central banks have accounted for a quarter of global gold demand, and this year is unlikely to be any different, especially since their focus is not on profit but on asset diversification,” commented the XTB expert.
According to the latest Goldman Sachs forecast, the price of gold is expected to rise to $3,000 by the end of this year. However, the rate of price increases is no longer as high as it was in mid-December 2024.
The growing threat of inflation should boost consumer interest in gold. Breaking the $3,000 mark this year is therefore possible.
From the perspective of the foreign exchange market and the financial market in general, the issue of the war in Ukraine is crucial. American journalists suggest that Trump is preparing to announce his willingness to sign a resource agreement with Ukraine. Regardless of what this would mean for Ukraine, such an announcement could be positively perceived by financial markets. Media reports indicate that U.S. aid to Ukraine has been halted. Since the beginning of the new administration, no new aid package has been approved, and so far, equipment has only been delivered under agreements signed during President Biden’s tenure. Ukraine may be forced to sign a ceasefire agreement if it wants to receive any support from the United States. Trump has previously stated that he wants a ceasefire agreement signed by April 20.
What is the situation for Polish investors? Gold is currently priced at over 11,000 PLN per ounce.
“When investing in gold in Polish zloty, there is a currency risk. If someone bought gold at the beginning of this year, the return on investment is not as high as when investing in dollars because the zloty has strengthened significantly,” summarized M. Stajniak from XTB. “In the long term, however, the zloty will not remain extremely strong, which should be considered in investment decisions. However, if the war in Ukraine were to end quickly, two very negative factors for gold investment prospects would emerge: further strengthening of the zloty and a decline in global gold prices.”
Source: https://managerplus.pl/zloto-w-gore-czy-przebicie-3-000-usd-za-uncje-to-tylko-kwestia-czasu-51536
