Why is this important
Investors and central banks are addressing the increasing demand for gold amidst a weakening dollar, expectations of a cut in the US Federal Reserve rate, and global uncertainty. For Uzbekistan, this enhances reserves and lowers currency risks.
What happened
- Gold prices rose by 1.5% during the day and have increased by over 35% since the start of the year.
- December futures reached $3602.4, an increase of 2.4% daily.
- Gold in Uzbekistan: 5-gram bullion costs 7.27 million soums (highest since April 24).
- The Central Bank of Uzbekistan purchased 9 tonnes of gold in June, becoming the largest buyer among regulators.
- Gold reserves in global central bank reserves surpassed the volume of US Treasury bonds for the first time since 1996.
What they say
Capital.com’s Kyle Rodd mentions that the weakening dollar and declining confidence in the Fed are boosting demand for gold. JPMorgan predicts the price could hit $3,675 by the end of 2025 and $4,250 in 2026. Crescat Capital states that gold has once again exceeded the Central Bank’s reserves.
Context
Donald Trump is increasing pressure on the Fed and is harshly criticising Jerome Powell and demanding the dismissal of Lisa Cook. Overall, the rise in gold is linked to interest in protective assets amid market instability and political turbulence in the US. Investments in gold ETFs have peaked since 2022.
