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Gold hits record high ahead of Trump trade tariffs coming into effect

The US president’s announcement was made in response to the ongoing trade tensions between the US and China. The Impact of the Tariff on the Gold Market The recent surge in gold prices is largely attributed to the US president’s announcement of new tariffs on Canadian and Mexican imports, as well as Chinese goods. The tariffs, which range from 10% to 25%, are expected to increase the cost of production for US companies, leading to higher prices for consumers. The impact on the gold market is multifaceted, with several factors contributing to the surge in prices.

Economic Indicators

  • The US economy is experiencing a slowdown, with GDP growth slowing down to 2% in the second quarter. The trade deficit with China has been increasing, with a record high of $419 billion in The US dollar has been weakening, making gold more attractive to investors. ### Market Sentiment*

    • Market Sentiment

  • Investors are becoming increasingly cautious, with a growing sense of uncertainty about the future of global trade.

    The S&P 500 is a widely followed index that tracks the performance of the 500 largest publicly traded companies in the US. It is widely regarded as a leading indicator of the overall health of the US economy.

    Trump’s economic policies spark gold price surge due to lower interest rates and geopolitical uncertainties.

    The Rise of Gold Prices: A Response to Trump’s Economic Policies

    The recent surge in gold prices can be attributed to the economic policies implemented by the 45th President of the United States, Donald Trump. One of the key factors contributing to this rise is Trump’s call for lower interest rates. This move has had a positive impact on the gold market, as lower rates generally lead to lower returns from other assets.

    The Impact of Lower Interest Rates on Gold

  • Lower interest rates make borrowing cheaper, which can lead to increased spending and investment in other assets. However, when interest rates are low, investors often turn to gold as a safe-haven asset, seeking to diversify their portfolios and reduce risk. Gold is often seen as a hedge against inflation, currency fluctuations, and economic uncertainty. ## Geopolitical Uncertainties and Economic Instability*

    • Geopolitical Uncertainties and Economic Instability

    The ongoing geopolitical tensions and economic instability have also contributed to the rise in gold prices.

    Gold is often seen as a hedge against inflation and a way to store wealth during times of geopolitical upheaval and uncertainty. Over 2024, gold soared more than 26 per cent in value, beating the S&P 500. The yellow metal is up almost 800 per cent since 2000.

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