Background of the Price Increase
The gold price has increased over the past weeks to a 4-week high, primarily due to growing uncertainties in US-China trade relations and a slight rise in dovish bets on the Federal Reserve. These developments have boosted demand for safe assets like gold, as investors seek to protect themselves from market fluctuations.
US-China Trade Conflict
The ongoing trade conflict between the USA and China has led to increased uncertainty in global markets. During such times, investors often look for safe havens to protect their wealth. Gold is traditionally regarded as a safe haven, as it is seen as a more stable form of investment when other markets are volatile.
Dovish Expectations for the Federal Reserve
The expectation that the Federal Reserve may lower its interest rates has also contributed to the rise in gold prices. Lower interest rates can diminish the appeal of bonds while simultaneously weakening the dollar, which can cause the price of gold to increase in dollars.
Current Market Developments
- Gold Price Development: The gold price was around $3,289 per ounce at the beginning of June 2025 and could rise to as much as $3,803 during the month, with an average price of about $3,449. On June 4, 2025, the gold price was quoted at approximately $3,368.74 per ounce.
- Interest Rate Decisions: The European Central Bank (ECB) plans another interest rate cut, further emphasizing the general trend towards lower interest rates in Europe and the USA. This development could support the gold price, as lower rates can reduce the demand for bonds and simultaneously raise the value of gold.
Outlook for Investors
The current situation is highly relevant for investors, as they need to adjust their investment strategies to the changing market conditions. The search for safe assets like gold may continue as long as uncertainties in global trade and expectations for interest rate cuts remain. However, investors should also keep an eye on the volatility of the gold price, as daily gains and losses can fluctuate significantly.
Overall, the gold price remains volatile due to current market conditions but offers an attractive alternative for many investors to other forms of investment in uncertain times.