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Gold has become the best performances of “Trump’s trade” in recent weeks, surpassing other main classes of assets from the US President’s inauguration, as fears of a trade war and a potential hit for global fuel demand for the Haven metal.
Bullion has increased this year at the price, as Trump starts imposing festive tariffs, and this week has hit a new record of $ 2,942.70 per three. It increased nearly 7 percent of the inauguration before January 20, despite sliding on Friday.
On the contrary, the S&P 500 stock index on Wall Street has increased less than 2 percent, while the other popular Trump stores such as bets on a stronger dollar, higher offering treasures or bitcoin.
“When trade contracts, gold is moving,” said James Steel, analyst of noble metals in HSBC, pointing to previous examples during the forged pandemic and global financial crisis.
“The more tariffs they continue, the more it will disrupt the world trade and it will be better for gold,” he added.
They burst out the growing growing stock in New York, which has increased 116 percent since the election, while merchants and banks have been rushing Move gold from Londonthe largest physical trading center and in the US. This created a week long order to withdraw gold from the vault of Bank of England.
Trump’s latest tariff Salvo includes a plan to introduce “reciprocal” tariffs to US trade partners, including allies and opponents. He also imposed an additional 10 percent of tariffs to the goods from China.
Analysts say the global trade war will reduce economic growth and inflation of fuel – factors that usually benefit.
“Gold is Trump’s tariff store,” said Nicky Shiels, analyst of MKS Pamp, a gold refinery. “There is a positive connection between the heading of the tariff and the price of gold more,” she added.
While gold continued their long rally, the other Trump crafts lost money. The dollar slipped 2.4 percent this year compared to the basket of other currencies and fell abruptly from the inauguration. A 10 -year -old American Treasury yields, which rose to just over 4.8 percent last month, have since returned to 4.48 percent because the debt price has recovered.
Traders and investors say A more gradual approach to tariffs than he was afraid, he raised the currencies of countries or regions with high exports, such as the euro. In the meantime, the shift in the focus of the market at the risk of growth from a trade war has forced investors to buy government bonds.
“Gold can act as geopolitical protection, inflation protection and a dollar hedge,” said Trevor Greetham, head of multiple assets at Royal London Asset Management.
“These are the first two to make gold with such a strong investment last year, and Central Bank and Retail bought a price more.”
The recent fall in Greenback added pressure on the gold, which is dollar prices, which is cheaper to buy in other currencies.
As gold has reached a series of record heights, some banks have already had to upgrade the prices they set in December. Last week, both UBS and Citigroup upgraded their target price to $ 3000 per ounce.
A strong shopping from central banks is expected to be dollazing from dollars this year, to be a key trigger for gold demand.
The central banks bought more than 1,000 tons of gold for the third year in a row, according to the World Council for Gold, industrial body.
Mark Bristow, CEO of Mining Company Barrick Gold, said that “chaos around the world” helped to encourage the demand of investor for gold as a safe haven.
“A very clear market tells you that there is only one spare currency in this world, which is one that politicians cannot print – and that is gold,” he said.
