Gold Prices Break New Records on Geopolitical Tensions and Increasing Physical Demand

Throughout history, gold has been considered a safe haven and an asset that investors have sought refuge in difficult times. Recent geopolitical tensions and strong physical demand for gold from central banks have pushed its value to a new high.

This week, it reached a record high of $2,390 per ounce, showing that the allure of gold is not just in the history books, but continues today.

Increasing Safe Haven Demand

As geopolitical tensions increase the risk perception of investors around the world, gold investment stands out as a safe haven. This leads to an increase in demand for gold, especially in times of uncertainty.

Central banks also play an important role in the rise of gold by increasing the demand for physical gold during this period. These movements prove that gold is a valuable asset not only for individual investors but also for national reserves.

The Role of Economic Data

This record high in gold prices was also driven by strong economic data. Although both headline and monthly producer price inflation were below expectations, the core annual rate exceeded expectations. This indicates that inflationary pressures are continuing and investors are turning to gold to protect its value.

Central Bank Policies

The policies of key institutions such as the US Federal Reserve (Fed) and the European Central Bank (ECB) also have a decisive influence on gold prices. Following the release of sticky consumer inflation data, markets revised their expectations for Fed rate cuts.

Analysts moved the first rate cut from June to September, later than previously expected. The ECB, on the other hand, signaled that it could start cutting rates as early as June, while keeping interest rates at record lows. Such policies are among the important factors that may cause gold prices to rise further.