One kilo of gold in the ABC Refinery Hut, served by Palion, in Sydney, Australia, on Thursday, April 17, 2025.
Brendon Thorne Bloomberg Getty images
Prices of gold tears with recent trading riots, which lead investors to a safe marina, and competitive assets, such as American Treasurys and Dollar, have fallen.
This is related to the seismic shift in the US trade policy as part of President Donald Trump, and the bullion “entered the emptiness”, as Vivek Dhar said, said the choice of the safe bank of the Bank of Australia Bank Australia.
“What makes this recent flight to safe demand is so unique is that the American and tax dollar have been sold as a safe dismissal of these American assets,” Dhar added.
Gold prices scaled fresh maxima and reached USD 3500 per ounce on Tuesday, and more analysts forecast that prices will continue. JP Morgan expects that yellow metal on average USD 3675 per ounce to the fourth quarter of 2025 and reaches USD 4,000 to the second quarter of 2026.
Prices of gold vis-a-vis dollar index Futures last year
And vice versa, American Treasurys have recorded a sale in recent weeks, and 30 years of income has reached the highest level since November 2023 at the beginning of this month. Meanwhile, the American dollar indicator has shifted and weakened 8% so far this year, showed data from LSEG.
While the 30-year tension profitability has gained about 2 base points so far, the increase within a week after the announcement of Trump of mutual tariffs was over 30 base points-10-year profitability also increased by 30 base points. Meanwhile, gold prices have increased by 25% this year, according to LSEG data.
While the profitability of long -dated US treasury fell from high strokes at the beginning of this month, and the dollar slightly strengthened when Trump withdrew from comments on the exemption of the chairman of the Federal Reserve Jerome Powell, the position among investors among American assets, he has already hit.
“Although this is far from the history of the” death of the American dollar “, it can be safely said that trust in the US, its economy and fundamental resources, USD and Treasurys have been reduced,” said CNBC Strateg Strateg of the World Gold Market.
Why gold fever
It seems that traditionally the opposite relationship between treasury profitability and gold has crashed. Usually, when the crops are higher, crumble becomes less attractive, taking into account the higher cost of alternative to keeping gold, because it does not pay interest.
The quality of Hedging Gold's Hedging is “unique”, said Michael Ryan, lecturer at the University of Waikato's School of Accounting, Finance and Economics.
The tariffs are expected to raise inflation in the USA, which means higher future interest rates, which in turn presses to Treasurys, said Ryan.
“Gold, however, is historically perceived as an inflation protection, which can explain for him preferences-so maybe this is perceived by farm properties by Gold, which make him” special “-he added.
Unlike government currencies or bonds, gold has no credit risk and is not associated with the economic or political trajectory of one nation.
Another factor of the breakdown of the traditional relationship between gold and Treasurys would be decreasing faith in America and the narrative of “exceptional American”, analysts said CNBC.
“There is poor trust in American assets due to economic and geopolitical uncertainty,” said Sonia Kumari, a freight strategist at Anz.
Markets commonly perceive Trump's tariff war as a politics error, and Gold perceived by Gold independence from any monetary and fiscal policy increased its appeal.
“Unlike government currencies or bonds, gold has no credit risk and is not associated with the economy or political trajectory of one nation,” said Alexander Zumpfe, senior precious metal trader at Heraeus. This is especially important at a time when trust in traditional financial instruments hesitates.
Further adding to the Gold gloss is a charm of the American dollar. The weaker dollar generally means that goods are valued in the green garden, including gold, more attractive for owners of other currencies.
Diversification
Central banks on the emerging market, which were underweight, compared to their developed market counterparts, turned to yellow metal and will probably remain strong buyers when they diversize from their reserves based on dollars, said Eli Lee, the main investment strategist in Singapore.
The last sale of the dollar has have evoked discussions about the global declarationquestioning Greenback's attractiveness as a reserve currency in the world.
Gold was raised as Potential alternative reserve main currency several times.
“The countries realized that gold was a potential security against American freezing foreign currency reserves for the lack of equalization with US policy,” said Dhar from the CBA.
Dhar said that the sale of the dollar was beneficial to gold, it is still difficult to see the future with a material departure from Greenback, taking into account the costs of transport and storage of gold-bullion is an uninteresting component of assets, also limits its attractiveness.
In addition, although there has been a slightly overwhelmed status of a secure Harvest Hall, it is still “really difficult” to replace, considering how it is “the most fluid market in the world,” said Todd Brighton, head of investors portfolio Franklin Investors.
He said that replacing American Treasurys as a safe haven does not happen at any time when we are moving towards a more multipolar world.