Our esteemed readers may find this headline somewhat strange – what is the author trying to tell us? The answer to this riddle is that, if my calculations are correct, we have, since the beginning of 2024, seen exactly 102 trading days on which the gold price has climbed to a new record high.
Trump threatens new punitive tariffs
This year, more than ever, the tailwind for gold seems to be triggered time and again by geopolitical events, most recently due to Trump’s announcement of punitive tariffs last Saturday. He threatened to impose 10 percent on eight European countries starting February 1 due to their stance in the conflict over Greenland and then increase these tariffs further over the course of the year. This caught the financial markets off guard, as the issue of tariffs had seemed settled.
Gold price exceeds 4,000 € per ounce for the first time
It was therefore no great surprise that safe havens enjoyed strong demand from the start of trading on Monday, with a particular focus on gold and silver. Both metals continued to hold broad investor appeal over the following two days, leading to new record highs this week. Incidentally, gold also broke the 4,000 € per ounce mark for the first time. Following Trump’s announcement of a framework agreement on Greenland via social media yesterday evening, indicating that tariffs would be off the table as of 1 February, gold gave up a moderate portion of its previous gains.
The gold price is also supported by the appreciation of the Chinese renminbi against the US dollar. At 6.955 renminbi per US$, it rose to a 30-month high, which at least somewhat dampens the rise in gold prices for Chinese buyers, who invest heavily in gold.
Weekly roundup for Gold in US dollars and euros
While gold prices stood at 4,605 US$ per ounce last Thursday morning, they ended the week at roughly the same level. After the issue of tariffs came back into focus over the weekend, prices jumped to around 4,690 at the start of trading on Monday, and after a strong rally on Tuesday and Wednesday, the record high now stands at 4,888 US$. After the de-escalation in the Greenland issue, the gold price dropped to 4,760 but had recovered to around 4,820 US$ per ounce this morning.
The Xetra-Gold price also rose to previously uncharted territory. From 127.20 € per gram last Thursday morning and at the end of the week, it rose to 133.95 yesterday morning and closed the trading day at 133 €. It was projected to kick off trading this morning at around 132.75 € per gram.
While some profit-taking is likely and the recent sharp daily increases could slow down somewhat, gold is likely to retain its luster as a diversification instrument in the medium term.
I wish all readers sound investment decisions and a golden, sunny weekend.