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An active refuge that has doubled in value in the past three years, attracts more investors while geopolitics becomes more turbulent and continues to obtain its analyst price objectives that the Fed is preparing to break the rate cut button. This may look like a cryptographic sale argument. But it is gold (GC = F).
By numbers, the precious metal sparkles. Gold prices have increased by more than 40% this year, far exceeding 10% of the S&P 500 (^ GSPC). Even Bitcoin (BTC-USD), which had a record year thanks to the embrace of the Trump administration, was left in the dust with yellow spots with a 20%gain.
Unlike the stock market market and its upward tides, there are people on the other side of this business. Gold’s boom also serves as an economic mood barometer – and not in the right direction.
Many of the factors raising gold prices would be considered disconcerting outside the context of an appreciating asset. The identity and the advantages of Gold as a reserve of value are linked to financial disorders. People, governments and institutions do not normally seek refuge when things are fine, and generally, when they do, they are in competition with the US dollar and various long -term bonds.
On the other hand, the summit of the 5,000 -year -old value reserve does not come despite, but alongside a record for technological shares and a global adoption of the Stock Exchange.
The potential of a drop in interest rates, as a balm on a labor market in difficulty, electrified the markets. Which, on the front, was the bad news of higher unemployment also came with the good news of a drop in expected rate, perhaps even a Jumbo decrease. The lower rates tend to signify higher gold prices, because the assets with security packages becomes more attractive compared to risk -free investments.
Even before all that, however, the post-pandemic era of global policy has shaken longtime alliances and gave birth to new tensions among governments. President Trump’s trade policy has injected a new uncertainty from economic perspectives and prompted investors to cover themselves against American assets.
According to an analysis by Morgan Stanley Research, the US dollar has ended the first half of 2025 with its greatest loss since 1973, and the pressure against the greenback should continue. As a protection against inflation and devalued currency, gold makes sense.
