Does gold relax and come back to its level in front of Trump? | economy

The yellow metal has recorded unprecedented recordings on the world markets – recently – in the light of an investment wave described as “crazy”, investors seeking refuge in the middle of an increase in the state of economic uncertainty in the world markets, which prompted the price of an ounce to break the growing financial and economic barrier of light and growing financial pressures.

Analysts now expect the yellow metal to reach $ 4,000 just a few weeks after the price exceeded $ 3,000 for the first time, according to the British Guardian.

Muhannad Erekat, chief financial analyst of CFI International – in Al Jazeera Net – said that gold has recorded an increase of approximately 33% since the start of this year “and has so far been the highest annual increase since 1979, and has also recorded an increase in April by around 12% and is also considered to be the largest monthly increase rate since August 2011”.

Size factors

Erekat added: “All these gains raised it to the highest levels of 3500 dollars an ounce, supported by a set of factors,” the most important of them:

1. The strongest demand is expected and the doubling of central banks in their possession of gold has been around 5 times since 2022, which is considered a change in the management of strategic reserves.
2. Accelerated flows to investment funds circulating due to increased fears of the global economic recession.
3. The continuation of uncertainty linked to customs tariff policies imposed by US President Donald Trump, which threatens the chances of recession, and this is what the President of the Central Bank, Powell, has agreed that these costs will undermine the bank’s capacity to contain inflation and improve growth and threaten to destabilize the labor market.

At the same time, the dollar fell to its lowest level in 3 years after Trump has put pressure on pressure on the federal reserve, calling for rigorous interest rates, noting that it studies the rejection of the federal reserve, before removing the call to reduce the cost of the loan.

The fears of political intervention in monetary policy shaken the dollar. Meanwhile, Trump’s threats – to impose customs duties, including a new survey on basic metal imports according to the White House – increased concerns concerning the slowdown in growth and high inflation, and these combined factors have led to a strong gold demand as a safe refuge.

But will gold continue its standard increases after the end of current causes of tension? Can he recite and return to his level before the Trump era?

In our attempt to answer this fundamental question, we will first learn the following elements:

Acute gold fluctuations through history

The performance of gold has been showing since 2005 so far that the levels close to $ 1380 The OCE and 2075 are the most important stations on the way to the height of gold, because they represented a resistance zone, and each time gold exceeded the areas that we are witnessing successive heights on gold prices, according to Erekat.

If we go back a little, the price has experienced several major fluctuations in recent decades, according to the “Macro Trands” platform, and it has reached its highest level in 1980 after its lowest levels in the 1970s.

In recent years, Gold has reached a higher level, renting a record of $ 2265 for an OCE in early April 2024, to attend a new historic increase in April.

Fluctuations

Over the past 50 years, the yellow metal has witnessed net and witness fluctuations, according to the “macro-tow” platform. The changes in the price of gold in part compared to the following important events led to the Investubia platform:

• The end of the Bretton Woods system in 1971, which allowed the US dollar to float freely, ended the fixed exchange rate between gold and dollar, and this period also experienced the peak of the inflationary recession in the United States, which was characterized by high inflation, low economic growth and high unemployment rates.
  All of this led to a sharp increase in gold prices in the 1970s, reaching its highest level at around $ 665 in January 1980.
• The price of gold has reached its lowest level locally at around 253 dollars per ounce in 1999, due to the high performance of the American economy and the strength of the dollar, which reduced the attractiveness of gold as alternative investment, and its price has reduced due to the market surplus, because many central banks have sold their reserves of yellow metals to collect funds and diversify their portfolios investment.
• The great recession that occurred after 2008 led to an escape from Safe Haven and an increased demand for gold, and its price increased from around $ 730 in October 2008 to $ 1300 by October 2010.
• The crisis of European sovereign debt between 2010 and 2012 raised concerns concerning the stability of the euro zone and the world economy, and the price of gold reached a new standard level of around $ 1825 in August 2011.
• The policy of “quantitative facilitation” led by the central American “in the 2013-2014 period indicated a progressive normalization of monetary policy and the promotion of the dollar, and the price of gold decreased by 29% of $ 1695 in January 2013 to $ 1,200 in December 2014.
• The corona pandemic in 2020 and 2021 caused unprecedented disruption, and the price of gold increased by $ 27% in January 2000 to more than $ 2000 by summer 2020.
• After the peak of the pandemic, gold prices dropped to a negotiation range between 1700 and 1900 dollars, before it was up at the end of 2023 at new standard levels at around $ 2135, then fell at a commercial range slightly greater than $ 2,000.
• In April 2024, gold reached new records exceeding $ 2265 per ounce, driven by growing Chinese demand and continuous fears concerning inflation.

Currently, we are witnessing a new high price of high gold prices that have reached record levels.

We come back to the previous question: can gold be used and return to its level before the Trump era?

The answer is not easy due to the entry of many factors that play an important role in the price of gold, and according to the financial expert Erekat, “the continuous realization of gold for gains is mainly associated with the extent of the factors that have originally led to its height, the most important of which is the state of economic uncertainty, high inflation and concern.”

In the event that these factors are mistreated, Erekat expects gold to decrease and the price of an ounce is due to the levels of almost $ 2,500.

But Erekat added: “There are not yet real indicators yet because the reasons that have led to the increase in gold, in particular with the climbing of the trade war between the United States and China and its unprecedented level of new levels.”

A historical fact remains worthy:

• In February 1915, in the middle of the First World War, the Gold Prize reached $ 615 per ounce, and after the war, he refused to reach $ 320 in May 1920, according to the Macro Trands platform.
• The gold then continued in a movement to climb to a new summit of $ 841 per ounce in May 1934, after which gold witnessed a curve to decrease faces in December 1970, reaching a background of $ 293.

From the above, it turns out that peaks are followed by two bottles, and the funds are followed by new peaks, and all of this has a direct or indirect relationship with geopolitical events in a world that has become smaller than a small screen in the fist.