The most important reasons for the rise in gold is high
Gold prices have witnessed an unprecedented rise, as the price of the ounce exceeded $ 3018 for the first time in history. Here are some reasons leading to the rise in the ounce of gold.
Reasons for the high price of gold
1 - American economic data and its impact
The recent economic data in the United States showed indications of slowing economic growth, which increased expectations that the Federal Reserve may tend to reduce its monetary policy or reduce interest rates during the coming period. Usually, low interest rates lead to high gold prices, because it reduces the cost of an alternative opportunity to keep it.
2 - Geopolitical tensions in the Middle East
The Middle East is witnessing an escalation in tensions, which prompted investors to search for safe havens such as gold. Political and security turmoil increases the uncertainty in the financial markets, which enhances the demand for gold as a safe origin.
3 - Weak American dollar
The US dollar has witnessed a strong decline in the recent period against a basket of major currencies, making gold more attractive for investors who deal with other currencies. Usually there is an inverse relationship between the dollar and gold, as the dollar twice the prices of the yellow metal.
4 - The strong demand from the central banks
In recent months, central banks have increased in several countries of their gold reserves as part of their strategies to diversify assets and reduce dependence on the dollar. This institutional demand contributed to strengthening prices.
5- Trade War
The trade war between the two largest economies in the world and the decline in customs definitions between the United States, China and the European Union
Future expectations for gold prices
1 - The effect of US federal decisions
If the Federal Reserve decides to reduce its monetary policy or indicate a reduction in interest rates, we may witness more rises in gold prices during the coming period.
2 - Continuing geopolitical tensions
Any new escalation in the Middle East or other regions may increase the demand for gold as a safe haven, which may push its prices to new standards.
3 - Investors and financial institutions ’tendencies
With the continued state of economic uncertainty, hedge funds and big investors may continue to pump more investments in gold, which enhances high prices.
In the end, gold exceeded the $ 3017 barrier an ounce, reflecting a turbulent economic and political environment that pushes investors towards safe assets. With the uncertainty of uncertainty, the bullish trend of gold may continue, especially if geopolitical tensions and the slowdown in the global economy continue.
