Why gold’s historic rally is about more than just Trump
The price of gold has risen more than 50 percent since the start of 2025 in a historic run for the asset.
SEATTLE (Scrap Monster): The price of gold has soared to a historic high, crossing $4,000 per troy ounce (31.1g) as global investors have flocked to the asset over the past year.
Gold futures, which are contracts to buy or sell gold at a certain price, passed the threshold on Tuesday, followed by the spot price of gold on Wednesday afternoon in Asia.
Gold has long been viewed as a favoured “safe haven asset” in times of economic uncertainty because it is a physical commodity that can be owned and stored.
But analysts say its surge in recent months points to a more dramatic shift: Gold may finally be breaking out of its shell to become an “asset for all occasions”.
What’s happened to the price of gold this year?
The price of gold has risen more than 50 percent since the start of 2025 in a historic run for the asset.
Much of the surge has been fuelled by United States President Donald Trump, who returned to the White House at the start of the year.
Gold prices rose sharply in April when Trump launched a trade war against much of the world, and it rallied again in August as the US president attacked the independence of the Federal Reserve – the US central bank.
In the face of so much uncertainty, many investors turned to more reliable assets, like gold.
But Trump’s tariffs and battles against the Federal Reserve are not the only factors driving gold’s continued upward trajectory since then: Japan’s leadership election over the weekend, the US government shutdown, and a deepening political crisis in France following the resignation of Prime Minister Sebastien Lecornu have also contributed, say analysts.
What’s behind the price surge this week?
Kyle Rodda, a senior financial market analyst at Australia’s Capital.com, told Al Jazeera that the surprise win by Sanae Takaichi in Japan’s Liberal Democratic Party leadership race had played a big role in this week’s surge.
Takaichi is set to become the next prime minister of Japan, the world’s fourth-largest economy, after running on a platform of aggressive deficit spending plus tax cuts and handouts to households to encourage economic growth.
Her victory upset markets as the yen – another “safe haven asset” for some investors – dropped to a 13-month low on Tuesday, according to the Reuters news agency. Gold, it appears, became a go-to alternative.
Courtesy: www.aljazeera.com