Beginning of the Gold Rally in Calendar Week 24, 2025
The gold markets are currently experiencing a significant rally driven by various factors. This development has substantial impacts on private investors who invest in commodities and stocks. Here are some key aspects that shed light on the emerging gold rally and its potential effects on gold stocks and the EUR/USD exchange rate:
Reasons for the Gold Rally
- Limited Supply and Geopolitical Uncertainties: Experts expect the price of gold to continue rising due to supply shortages and geopolitical tensions. Some forecasts suggest that the price of gold could rise to as much as USD 6,000 by 2029.
- Weak US Dollar: A weaker US dollar can also drive up the price of gold, as gold is often seen as a safe investment during times of economic uncertainty.
Potential Impacts on Gold Stocks
- Increased Demand: A rising gold price rally can increase demand for gold stocks, as investors try to profit from the rising gold price trends.
- Growing Profits: Gold mining companies could benefit from higher gold prices, as their profits increase when the costs of gold extraction remain constant.
Effects on the EUR/USD Exchange Rate
- Exchange Rate Dynamics: The EUR/USD exchange rate can be indirectly influenced by the developments in gold prices. A weaker US dollar driving up the price of gold could also affect the EUR/USD exchange rate, as a weaker dollar could strengthen the euro.
- Economic Stability: The European Central Bank (ECB) warns of potential risks to financial stability from extreme price fluctuations in the gold market, which could indirectly also affect the EUR/USD exchange rate.
Risks and Challenges
- Logistical Challenges: The gold rally can lead to logistical bottlenecks, as futures contracts are often settled where the gold is not stored. This can lead to short-term shortages and a “squeeze out,” which could mean unpredictable losses for financial institutions.
- Market Volatility: The increasing volatility in the gold market can also lead to greater uncertainty among investors, which could influence the demand for safe investments.
Outlook for the Near Future
- Short-Term Outlook: The price of gold could continue to rise in the coming days, with expected daily ranges between USD 3,430 and 3,510.
- Long-Term Perspective: In the long run, the price of gold may continue to rise, driven by geopolitical uncertainties and a limited supply.
In summary, the emerging gold rally offers both opportunities and risks for private investors. While it may provide potentially high returns for gold stocks, it also carries the risk of market volatility and logistical challenges.