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0 News Ghana, Latest Updates and Breaking News of Ghana, Roger A. Agana, https://newsghana.com.gh/gold-hits-highest-level-since-october-amid-trade-tensions-and-us-dollar-weakness/
Gold prices have continued their strong rally for the third consecutive day, reaching their highest point since October of last year, nearing $2,764 per ounce.
The precious metal’s gains are driven by the weakening US dollar as the market reassesses the looming trade war and the growing uncertainty surrounding the global economy, with escalating geopolitical tensions and no clear resolution to ongoing conflicts.
The rise in gold prices comes as newly elected US President Donald Trump reiterated his threats to impose tariffs on both China and Europe in February, raising concerns about how these trade disputes will affect the economic outlook for both regions. This has added to the already fragile state of the global economy, struggling under inflation, weak consumer spending, and geopolitical uncertainties.
In Europe, the ZEW Economic Sentiment Index in Germany showed weaker-than-expected readings for January, reflecting the ongoing recession, inflationary pressures, and political uncertainty with Trump’s return to power. Despite these concerns, European stock indices have remained relatively stable.
However, amid these uncertainties, there are signs that negotiations could help avert a full-blown global trade war. The Chinese Foreign Ministry has expressed a desire to strengthen stable relations with the US, following conciliatory gestures during Trump’s inauguration, including a visit from the Chinese Vice President. Experts believe these signals, combined with Trump’s mixed statements about tariffs, suggest a possible intention to negotiate more favorable trade terms rather than pursue aggressive tariff policies.
This uncertainty surrounding trade, alongside the weakness in the US dollar and Treasury yields, has opened the door for further gold price gains. Although there are fears about the consequences of tariffs, the potential for diplomatic negotiations could support the case for gold’s continued strength.
On the monetary policy front, the Federal Reserve’s stance remains unchanged. Despite the current economic conditions, the markets still do not expect a rate cut until at least June, according to the CME FedWatch Tool, keeping the path for interest rates relatively stable in the near term.
News Ghana, Latest Updates and Breaking News of Ghana, Roger A. Agana, https://newsghana.com.gh/gold-hits-highest-level-since-october-amid-trade-tensions-and-us-dollar-weakness/
