Geopolitical Tensions and Gold Prices
The recent developments in the gold market show an upward trend that is strongly influenced by geopolitical risks. In particular, the increasing tensions between Israel and Iran contribute to this development. These geopolitical tensions enhance the demand for gold as a safe investment alternative, driving the price upwards.
Geopolitical tensions, such as those between Israel and Iran, often lead to increased uncertainty in the global markets. In such situations, investors seek safe assets to protect their wealth. Gold is traditionally regarded as such a safe investment, as it is seen as a store of value that is independent of currencies and political events. Therefore, the demand for gold rises in times of heightened geopolitical tensions, which drives the price higher.
Federal Reserve’s Interest Rate Decision
The upcoming interest rate decision by the Federal Reserve (Fed) is another important factor that can influence the gold price. Changes in the Fed’s rates affect the value of the US dollar and the attractiveness of investments in dollars. When the Fed lowers interest rates, this can weaken the dollar and push the gold price up, as gold is often traded in US dollars. Conversely, an increase in rates can strengthen the dollar and lower the gold price, as higher rates make dollar-denominated investments more attractive.
Current Gold Price Development
In 2025, the gold price has already shown some significant movements. In April 2025, the gold price reached a monthly high of about €2,975.42/oz, indicating a strong recovery after a prior correction. In May 2025, the average gold price per ounce was around $3,281. In Germany, the gold price in June 2025 ranged between about €93.39 and €95.22 per gram for 24-carat gold.
Summary
The combination of geopolitical tensions and the upcoming interest rate decision of the Federal Reserve creates a complex environment for the gold market. While geopolitical risks can drive the gold price up, the future development also heavily depends on the Fed’s decisions. Investors are closely monitoring these developments to adjust their investment strategies accordingly.