Gold prices rise in global markets: Impact of geopolitical tensions and economic uncertainty
Gold prices rise in global markets: Impact of geopolitical tensions and economic uncertainty
Gold prices have risen again in the global market amid global geopolitical tensions and economic uncertainty. New US sanctions on Russia and China's export control plans have increased demand for gold as a safe investment. As a result, gold prices rose in the international market on Thursday (October 23), according to a Reuters report.
According to the report, the price of gold in the spot market reached $4,114 per ounce on Thursday morning, which is 0.5% higher than the previous day. Earlier on Wednesday (October 22), the gold market saw its biggest collapse in the past two weeks. Meanwhile, the price of gold for December delivery in the US futures market rose 1.6% to $4,128.40 per ounce.
Impact of geopolitical tensions
According to market analysts, the Trump administration is planning to impose new export controls on China, which could include software-driven products such as laptops and jet engines. This is seen as a response to China's export controls on rare earth minerals. In addition, for the first time in the Trump administration's second term, Ukraine-related sanctions have been imposed on Russia, targeting Russian oil companies Lukoil and Rosneft. These developments have further complicated the global economic situation.
Historic rise in gold prices
Gold prices have risen by about 57% this year, hitting a record high of $4,381 an ounce on Monday (October 20). The prospect of lower interest rates, continued gold purchases by central banks and global economic uncertainty have played a major role in the rally.
The market is betting that the Federal Reserve will cut interest rates by 25 basis points next week. Typically, the price of non-yielding assets like gold increases in a low interest rate environment.
"Gold is an effective portfolio diversifier. If global political and economic conditions worsen, gold prices could rise to $4,700," said Mark Hafley, chief investment officer at UBS.
Other precious metals
Along with gold, silver prices rose 1.3% to $49.14 per ounce in the spot market. Platinum is at $1,643 and palladium is at $1,456.
Rising prices of gold and other precious metals amid global economic and political uncertainty are fueling investor interest in safe assets. Analysts believe that geopolitical developments and interest rate decisions will further impact the gold market in the coming days.
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