Gold Prices Soar to Unprecedented Heights Amid Global Instability

Recently, gold has experienced significant fluctuations in its prices due to ongoing economic and political changes both regionally and globally. Gold prices have been heavily influenced by global inflation, monetary policies implemented by central banks, as well as political tensions and wars, which have led to an increase in demand for gold as a safe haven. Additionally, investment funds and central banks have played a prominent role in driving prices higher.

Saleem Dheeb, Secretary-General of the Jewelers' Syndicate, spoke to Al-Anbat, stating: "As inflation rises, the value of gold increases as a safe haven against the erosion of the purchasing power of currencies. Consequently, gold has become a crucial refuge for investors who are looking to preserve their wealth amid the ongoing rise in prices."

He pointed out that global deficits and high debt, along with interest rates on the U.S. dollar, have contributed to the surge in gold prices, explaining that whenever interest rates are reduced, gold prices directly increase. This is due to a decrease in returns on U.S. dollar investments, prompting investors to turn to gold as a safer alternative.

Dheeb continued: "Since gold is priced in dollars, any decline in the dollar's purchasing power leads to a rise in gold prices against the dollar. This depreciation of the dollar contributes to the increased demand for gold, thereby pushing its prices higher."

He noted that one of the key factors contributing to the rise in gold prices has been the continuous effort of investment funds and central banks to increase their gold reserves, creating pressure on supply and further driving up prices.

Dheeb further explained that the U.S. Federal Reserve's monetary policy has been caught between two difficult choices: either raise interest rates to curb inflation, which could lead to increased unemployment and a decrease in durable goods sales, or lower interest rates, which would lead to a rise in gold prices.

He also emphasized that economic decisions made by the U.S. administration under President Trump significantly contributed to the rise in gold prices, particularly with changes in policies such as raising tariffs, followed by President Trump's visit to the Middle East, which brought some stability to gold prices. However, with the ongoing Gaza conflict, the Russia-Ukraine war, and Israel's entry into a war with Iran, gold prices have once again experienced extreme volatility.

On the other hand, Dheeb highlighted the impact of global prices on the local market in Jordan, where pricing starts from the global price and is then adjusted based on local supply and demand. He added that demand for gold in Jordan has shifted this year, with investment purchases surpassing those for jewelry. The market has seen an increase in demand for gold ounces and liras, particularly after the price of an ounce rose by more than 30% in one year.

He mentioned that the Jewelers' Syndicate has kept up with price fluctuations by issuing daily bulletins on changes in global prices. The Syndicate also allowed the production of 14-karat gold in an effort to offer an option more suited to the financial capabilities of citizens, while closely monitoring local markets in collaboration with the Jordan Standards and Metrology Organization.

Mohammad Al-Hroub, a trader, stated that the rise in global gold prices has become extreme, especially given the ongoing wars between Russia and Ukraine, the Gaza conflict in the Middle East, and the recent war between Iran and Israel, along with the continuous political tensions in the region. He also pointed out that China has been buying large quantities of gold as a safe haven, adding economic weight.

He observed the confusion and anxiety evident in the actions of local citizens, as the vast majority are now buying gold as a store of wealth rather than for decoration. This shift has led to an increase in demand for both the Rasheed and English gold liras, as well as ounces. Many people have also opted to sell their existing gold and jewelry in order to make substantial profits compared to gold prices from previous years.

Al-Hroub noted that local traders and gold markets have adapted by offering lower-karat gold jewelry, such as 14-karat gold, and smaller weights, making it more affordable for citizens, especially those preparing for marriage. He emphasized that many young couples are now unable to afford the traditional wedding jewelry, known as "the bride's dowry," which is a crucial part of Jordanian marriage customs.

In conclusion, gold prices remain susceptible to ongoing fluctuations due to global political and economic events. Despite the challenges facing gold markets, this precious metal will continue to be one of the safest havens sought by individuals and institutions during times of crisis. It is expected that gold price volatility will continue based on changes in monetary policy and global geopolitical factors, making it crucial for investors, traders, and citizens to closely monitor these developments.