Gold market reached an unprecedented peak, surpassing $3500 per ounce for the first time.
Gold's Fluctuating Fortunes:
Gold's value continues to soar, reaching $3492.6 (+1.96%) at 09:36 Moscow time on a Chicago Mercantile Exchange June delivery gold futures contract. This impressive rise brought gold prices close to $3500, with spot prices momentarily brushing the $3500 mark. However, by 09:40 Moscow time, the precious metal took a brief dip to $3480.95 (+1.65%) (1).
The rise in gold is attributed to anxieties surrounding U.S. President Donald Trump's possible dismissal of Federal Reserve Chairman Jerome Powell (2). This apprehension has provoked investors to shift their funds away from U.S. equities, bonds, and the dollar. According to Bloomberg, this exodus of funds has caused gold to surge to record highs, eroding trust in the U.S. economy (3).
Kallanish Index Services analyst Li Lian Le echoed this sentiment, commenting that gold's rapid ascension this year symbolizes a profound mistrust in the U.S. like never before (3).
This economic uncertainty first emerged on April 21, when the dollar plummeted to a three-year low following Trump's criticisms of Jerome Powell (4). In a series of social media posts, Trump labeled the Fed Chair a "big loser" and demanded immediate rate cuts. This was perceived as a direct threat to the Fed's independence, causing the dollar index DXY to slide to 97.923 on April 21, its lowest since March 2022 (4).
On the international forex market on April 22, the dollar traded around 81 rubles. At 10:04 Moscow time, the dollar was worth 81.25 rubles (+0.31%). The greenback briefly dipped to 80.36 rubles before rebounding (4). The official CB rate for April 22 was set at 80.76 rubles per dollar, according to Bank of Russia data. This official rate hasn't been seen since the summer of 2023 (4).
Gold has experienced a stunning 33% increase since the start of the year, spearheaded by trade tensions that have roiled markets (5). Goldman Sachs foresees that gold prices will escalate to $4000 per ounce by mid-2026 (5).
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Insights:
- The potential dismissal of Jerome Powell by President Trump has stirred economic uncertainty, pushing investors towards safe-haven assets like gold (1)(4). Gold's unique role as a hedge against recession risk has been highlighted by Goldman Sachs, who recently raised their 2025 gold price forecast to $3,700 per ounce (2).
- Goldman Sachs anticipates a potential trading range between $3,650 to $3,950 for 2025, with mid-2026 gold prices remaining uncertain but plausibly strong (or potentially appreciating further), given the continuation of economic uncertainty and demand for safe-haven assets (2)(5).
- Recent changes in Trump's stance, including softer rhetoric on China and Powell, have resulted in a decline in gold prices from record highs. However, any resurgence of tensions could once again boost gold prices (3).
- Goldman Sachs has forecasted that gold prices will escalate to $4000 per ounce by mid-2026, citing gold's unique role as a hedge against recession risk.
- The potential dismissal of Federal Reserve Chairman Jerome Powell by President Trump has pushed investors towards safe-haven assets like gold, causing its price to soar.
- Gold prices reached $3492.6 (+1.96%) at 09:36 Moscow time on a Chicago Mercantile Exchange June delivery gold futures contract, with spot prices briefly touching $3500.
- By 09:40 Moscow time, the precious metal took a brief dip to $3480.95 (+1.65%) after the initial surge.
- Economic uncertainty, first emerging on April 21, has caused the dollar to plummet to a three-year low, with the dollar index DXY sliding to 97.923 on April 21.
- Kallanish Index Services analyst Li Lian Le commented that gold's rapid ascension this year symbolizes a profound mistrust in the U.S. like never before.
- Gold has experienced a stunning 33% increase since the start of the year, spearheaded by trade tensions that have roiled markets, and it is predicted to stay relevant in the field of personal-finance, technology, education-and-self-development, politics, and general-news due to its role as a safe-haven asset.
