The ounce of gold in euros is recovering for the second consecutive dayreaching a maximum of two days this Thursday about € 2,840 after having fallen in the first part of Wednesday to a minimum of ten days in € 2,801.
The confirmation of sending letters from the US to several countries announcing the new tariffs and the imposition of a 50% tariff to copper, alerted markets yesterday, causing the Xau/EUR to close over € 2,827, winning 0.45% in the day.
In what we have been going on, the Gold price in euros It has rebounded from a minimum daily in € 2,824 to a Maximum of two days at € 2,839.46. At the time of writing, the XAU/EUR trades about 2,833.52, winning 0.22% in the day.
From one year to this part, the price of gold in euros has risen 28.64%.
Gold recovers its impulse with the new Trump tariffs
- At the last minute of Wednesday, the US president, Donald Trump, announced that he had sent a new round of letters to several countries with the tariffs required from August 1 if agreements are not reached. The tariff that surprised the most was the Brazil Tax, 50%justified as a punishment for being part of the BRICs and by the trial that is being held against Jair Bolsonaro, Trump’s ideological friend.
- Algeria, Iraq, Libya and Sri Lanka received requests from 30%, while Qeu Moldova and Brunei will pay 25%, and Philippines 20%. The other tariff that weighed on the markets is 50% of copper imports. Gold won a traction with the announcement to the commercial fears of the market.
- The lack of concretion of the possible tariff agreement between the United States and the European Union is weighing on the feeling at the Xau/EUR crossing, although tariffs are not expected to exceed 10%, which limits a major impulse of the yellow metal.
GOLD – FREQUENT QUESTIONS
Gold has played a fundamental role in the history of mankind, since it has been widely used as a deposit of value and a half of exchange. At present, apart from its brightness and use for jewelry, precious metal is considered an active refuge, which means that it is considered a good investment in turbulent times. Gold is also considered a coverage against inflation and depreciation of currencies, since it does not depend on any specific issuer or government.
Central banks are the greatest gold holders. In their objective of supporting their currencies in turbulent times, central banks tend to diversify their reserves and buy gold to improve the perception of strength of the economy and currency. High gold reserves can be a source of trust for the solvency of a country. Central banks added 1,136 tons of gold worth 70,000 million to their reservations in 2022, according to data from the World Gold Council. It is the largest annual purchase since there are records. The central banks of emerging economies such as China, India and Türkiye are rapidly increasing their gold reserves.
Gold has a reverse correlation with the US dollar and US Treasury bonds, which are the main reserve and shelter assets. When the dollar depreciates, the price of gold tends to rise, which allows investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rebound in the stock market tends to weaken the price of gold, while mass sales in higher risk markets tend to favor precious metal.
The price of gold can move due to a wide range of factors. Geopolitical instability or fear of a deep recession can cause the price of gold to rise rapidly due to its condition of active refuge. As an asset without yield, the price of gold tends to rise when interest rates lower, while the money increases to the yellow metal. Even so, most movements depend on how the US dollar (USD) behaves, since the asset is quoted in dollars (Xau/USD). A strong dollar tends to keep the price of gold controlled, while a weakest dollar probably thrusts gold prices.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
