As we entered 2025, the global economy found itself caught between inflation and recession. Expectations that central banks would ease their monetary policies increased investors' search for a safe haven, strengthening demand for gold. During this period, the ounce price of gold reached record levels.
The tariffs that came to the agenda with the inauguration of US President Donald Trump created uncertainty in the global economic outlook. This became a significant factor pushing gold prices higher. Additionally, concerns regarding the growing US budget deficit also supported gold prices.
CENTRAL BANK GOLD PURCHASES
Rising geopolitical and economic risks have led central banks to purchase gold. According to World Gold Council data, there was a large influx of investors into physical gold-backed exchange-traded funds in the first half of the year. Survey results show that the vast majority of participants believe that gold reserves will increase.
FED POLICIES AND UNCERTAINTIES
Uncertainties continue on the side of the US Federal Reserve (Fed). The possibility of Trump choosing a new name for the Fed chair position is creating anxiety in the markets. Fed Chair Powell maintains a cautious stance against Trump's demands for interest rate cuts. This situation creates uncertainty over the Fed's future policies.
THE FUTURE OF GOLD
Gold started 2025 at 2,624 dollars and rose to 3,502 dollars during the year, breaking a historic record. Having gained 33 percent in value in the first half of the year, gold became the most profitable asset for investors. Closing last week at 3,355 dollars, gold will be directed by Trump's tariffs in the new week.
In the coming months, Fed policies and uncertainties regarding tariffs may affect gold prices. However, if clarity is achieved on tariffs on August 1 and the Fed begins interest rate cuts in September, gold prices are expected to rise again.
News Source: 12punto
