Key information
- Gold prices rose to $2,703 per ounce after gaining 1.25 percent.
- Heavy central bank buying is driving gold's uptrend, while technical factors influencing recent volatility are minimal.
- Central bank actions are not intended to weaken the U.S. dollar but rather reflect a desire to diversify reserves.
The price of gold jumped beyond 2,700 dollars (2,511 euros) per ounce on Friday, approaching the records reached before the election of Donald Trump. After a turbulent November, gold saw significant gains this week, rising 1.25 percent to $2,703 an ounce.
Analyse et perspectives
Goldman Sachs' Samantha Dart attributed the upward trend to heavy central bank buying and minimal technical factors that have influenced recent volatility. She noted that falling prices presented an “attractive entry point” for those with a bullish outlook on gold due to current political uncertainty.
Ms Dart stressed that central banks continue to play a leading role in the movement of gold prices, a phenomenon observed since 2022, when Western sanctions against Russia following the invasion of Ukraine were sparked concerns among emerging markets about possible asset freezes. She suggested that these central bank actions were not necessarily aimed at weakening the U.S. dollar, but rather reflected a desire to diversify reserves.
Other supporting factors
In addition to buying by emerging market central banks, Dart highlighted other factors that contributed to gold's performance. The resurgence of exchange-traded funds has played a role, particularly since the Federal Reserve began cutting interest rates. Purchases of physical gold as a safe haven further amplify these positive trends.
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