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Gold Surges Above $2,400 Amid Political Uncertainty In The US

by THEFUTURE.TEAM
July 22, 2024

Gold has surged past the $2,400 per ounce mark, driven by increasing demand from investors seeking safe havens amidst rising political uncertainty in the United States. The recent announcement by President Joe Biden that he will not seek re-election has intensified market volatility. Biden’s decision to endorse Vice President Kamala Harris for the Democratic nomination has added to the political unpredictability, with former President Donald Trump emerging as a strong contender in the polls.

This political turbulence has led investors to turn to gold, traditionally considered a secure asset during times of instability. Additionally, the weakening US dollar has further bolstered gold prices. As markets opened on Monday, the dollar’s decline provided additional momentum for gold, as a weaker dollar typically enhances the metal’s appeal by making it cheaper for holders of other currencies.

The ongoing pre-election campaign in the US, coupled with recent events such as an assassination attempt on Trump in Pennsylvania, has created a climate of uncertainty. This has prompted investors to seek refuge in gold, driving its price to new highs.

Market analysts hold mixed views on the long-term impact of a potential Trump victory on gold prices. Some anticipate that Trump’s policies, which may include higher trade tariffs and increased US-China tensions, could strengthen the dollar and bond yields, traditionally inversely related to gold prices. However, expectations of looser fiscal policies under a Trump administration might counteract this effect, sustaining the demand for gold.

The recent performance of gold reflects heightened investor expectations that the Federal Reserve may shift towards monetary easing. Lower interest rates generally favour gold, as they reduce the opportunity cost of holding the non-yielding asset.

JPMorgan Follows Goldman In Raising Euro Area’s 2025 Growth Forecast

by THEFUTURE.TEAM
March 10, 2025

JPMorgan has joined Goldman Sachs in revising its economic growth forecast for the euro area in 2025, increasing it by 0.1 percentage point to 0.8%. For 2026, the bank now expects growth of 1.2%, an upward revision of 0.3 percentage points.

“This revision is primarily driven by Germany, but we also anticipate slightly stronger growth across the rest of the region due to spillover effects and a somewhat looser fiscal policy,” JPMorgan economists stated in a note released late Friday.

Last week, German political parties negotiating to form a new government reached an agreement to relax fiscal rules, potentially triggering a borrowing surge of nearly one trillion euros to finance defence and infrastructure investments.

However, JPMorgan cautioned that uncertainty surrounding Donald Trump’s tariff policies could weigh on economic growth in the coming months. Additionally, the bank projects a slight increase in euro area inflation for both this year and next.

On Thursday, the European Central Bank (ECB) made its sixth rate cut since June, lowering the deposit rate to 2.5%. Despite this, the ECB warned of “phenomenal uncertainty,” citing risks such as trade wars and increased defence spending, which could drive inflation higher and potentially delay further policy easing.

In its note, JPMorgan also revised its outlook for ECB rate cuts, no longer expecting a reduction in April. Instead, the bank now anticipates only two rate cuts this year—in June and September—compared to its previous forecast of three.

“We see risks that the potential imposition of U.S. tariffs on European goods could push the ECB toward a live decision in April and back to a back-to-back rate-cut approach,” JPMorgan added.

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