Political uncertainties and the weak economy make investors flee into safe-haven investments. That drives up the price of the precious metal. Great political risks and ongoing global growth weakness are increasingly driving investors into perceived safe havens. This also benefits the gold price: On Friday, the price for a troy ounce (31.1 grams) rose to 1358 dollars.
This is the highest level since April 2018. Calculated in euros, the highest level since April 2017 was reached with 1203 euros.Gold is currently benefiting from several developments. On the one hand, the precious metal, also known as the crisis currency, is gaining momentum as investors go on the defensive in the face of falling equity prices. The need for assets considered safe is high in the face of high political risks, such as tensions between the United States and Iran, and the US-China trade conflict.
There are also falling capital market rates, which reduce the interest disadvantage of gold. The precious metal, unlike other perceived safe investments such as fixed income securities, does not yield regular income such as interest. If capital market rates fall, this disadvantage is less significant. The declining market rates are also a consequence of high uncertainty among investors. Added to this is weak global economic growth.