“Without visibility, we turn to the refuge value”: why the course of gold continues to climb

Gold continues to shine. The course of the precious metal crossed the level of the 3000 dollars on Friday, a first in its history, galvanized by its status of refuge value in the face of geopolitical concerns and the trade war started by the United States of Donald Trump.

The Once d’Or climbed on Friday up to 3004.94 dollars. Around 10:40 a.m. GMT (11:40 am in Paris), she took 3.36 % at 2990.20 dollars. She had already exceeded her previous February record on Thursday in the process of Donald Trump’s new threats.

Trade war

The latest threat to the American president, on European alcohol, has largely contributed in recent hours to raise the price of yellow metal: he announced Thursday that he wanted to tax at 200 % champagnes, wines and other alcohols in France and the European Union (EU) if the 50 % customs tariffs announced by Brussels on American whiskey – themselves in reprisals and aluminum – were not abandoned.

“The equation remains simple for gold: the higher the customs duties, the greater the uncertainty and the stronger the demand,” sums up Stephen Innes, analyst at SPI AM. “World growth concerns”, which could be penalized by these customs surcharges, “strengthen the role of gold as an ultimate coverage in an increasingly fragile economic context,” said the analyst.

Drop in dollar

Trump’s desire to lower the value of the dollar, hoping to relaunch exports, also benefits during gold. A low dollar makes the purchase of gold less expensive for investors using other currencies, thus increasing global demand for precious metal.

“Investors say to themselves that holding the dollar has less interest since its value is led to fall. As there is no reference currency above the dollar, they turn to gold, ”explains Stéphanie Villers. “They turn away from the markets for more clarity,” she sums up.

Geopolitical fears

“The doubts about the peace agreement between Ukraine and Russia have increased uncertainty” on the markets, also supporting the course of precious metal, adds Russ Mould, analyst at Aj Bell.

Vladimir Putin pointed out on Thursday that “important questions” should be resolved concerning the United States proposal for a truce in Ukraine, Donald Trump wishing to be implemented without delay. The Ukrainian head of state Volodymyr Zelensky for his part warned against “the very predictable and very manipulative words of Putin in response to the idea” of this cease-fire that kyiv accepted.

Central banks request

The price of gold finally benefits from the demand of central banks, which seek to cover themselves with risks thanks to ingots. After the invasion of Ukraine by Russia in early 2022, the exchange reserves of the Russian Central Bank held abroad had been frozen, under international sanctions. This measure, coupled with current uncertainties on the American economy, pushes central banks to detach from American assets in favor of gold.

In the past three years, central banks have bought more than 1000 tonnes of gold while, during the previous decade, they acquired an average of just less than 500 tonnes per year, echoes. “All over the world, central banks increase their gold reserves in response to the untenable structure of American debt and increasing concerns concerning the domination of the US dollar as a global reserve currency,” said Daniela Sabin Hathorn, analyst at Capital.com.