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.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Al Bawaba
an hour ago
- Al Bawaba
Kuwait's Ministry of Finance charts course for fiscal innovation and sustainable growth
The Ministry of Finance's efforts to advance fiscal resilience, financial sector development and investor engagement under Kuwait Vision 2035 were the focus of a recent high-level meeting between Noora Al Fassam, Minister of Finance and Minister of State for Economic Affairs and Investment, and senior representatives from Oxford Business Group (OBG), including Andrew Jeffreys, the Group's Chief Executive Officer, and Cristina Mirica, Country Director for Kuwait. The meeting provided an opportunity to discuss the Ministry's evolving mandate, with particular attention given to the implementation of the new Public Debt Law. The legislation establishes a KD 30 billion ceiling on sovereign borrowing across local and international markets, enhancing the capacity of the Central Bank of Kuwait and the Kuwait Investment Authority to manage debt sustainably. Discussions also highlighted the Ministry's progress in modernising Kuwait's mortgage framework to stimulate private sector lending and expand access to housing finance. Broader reforms in public financial management and fiscal governance were addressed as part of the Ministry's commitment to building a resilient and transparent economic environment. The Minister also underlined the importance of clear communication with stakeholders as reforms progress. 'By implementing robust public debt legislation and modernising the mortgage regime, we are taking decisive steps to strengthen fiscal resilience and support sustainable growth,' she said. 'It is essential that we convey these developments transparently to global investors and partners.' Andrew Jeffreys, CEO of Oxford Business Group, welcomed the dialogue and the opportunity to support the Ministry's objectives. 'Our discussion with Her Excellency and her team provided valuable insight into Kuwait's fiscal reform agenda,' he said. 'We look forward to exploring ways to help articulate the Ministry's progress and vision to the international business community.' The engagement forms part of OBG's research for The Report: Kuwait 2025, which will include in-depth analysis of Kuwait's economic trajectory, covering fiscal governance, debt management frameworks, financial sector innovation and public-private partnerships.
Ammon
5 hours ago
- Ammon
When grand buildings signal institutional decay
Ammon News - PRINCETON — Central-bank independence, one of the late twentieth century's most consequential policy revolutions, led to a decline in inflation rates around the world. Today, however, the foundations of that institutional paradigm are eroding, particularly in the very countries that once epitomized it: the United Kingdom and the United States. While US President Donald Trump's attacks on Federal Reserve Chair Jerome Powell have been unusually abusive, tensions between the Fed and the White House are nothing new, especially when national security dominates the political agenda. During the Korean War, President Harry Truman pushed the Fed to keep interest rates low to help finance defense spending. President Richard Nixon openly bullied the hapless Fed Chair Arthur Burns, and even Ronald Reagan made no secret of his frustration with Paul Volcker's tight monetary policies. In the aftermath of the Cold War, the so-called 'peace dividend' and a much-improved fiscal position made US economic policymaking relatively harmonious. But today, persistent deficits and the prospect of a new Cold War with China have reignited the fundamental tension between the executive branch and the Fed. Trump's relentless barrage of insults directed at Powell, calling him a 'numbskull,' a 'stubborn mule,' and 'always too late' – adds a particularly pungent flavor to the relationship. His latest target is the cost of the ongoing renovation of the Fed's Washington headquarters, denouncing the 'palatial' project as needlessly extravagant and wildly over budget. Trump's new line of attack echoes a classic observation by British satirist C. Northcote Parkinson. Writing in the 1950s, Parkinson noted that lavish new headquarters often signal institutional decline. As he put it, 'a perfection of planned layout is achieved only by institutions on the point of collapse.' To illustrate his 'law of buildings,' Parkinson cited the example of Louis XIV, who moved his court to Versailles in 1682, just as France was reeling from a string of military defeats. He also pointed to the interwar League of Nations, which began construction of its bombastic Palais des Nations in Geneva in 1929 – at the onset of the Great Depression – and completed it in 1938, by which point the League had become irrelevant. Trump's new line of attack echoes a classic observation by British satirist C. Northcote Parkinson. Writing in the 1950s, Parkinson noted that lavish new headquarters often signal institutional decline. As he put it, 'a perfection of planned layout is achieved only by institutions on the point of collapse.' To illustrate his 'law of buildings,' Parkinson cited the example of Louis XIV, who moved his court to Versailles in 1682, just as France was reeling from a string of military defeats. He also pointed to the interwar League of Nations, which began construction of its bombastic Palais des Nations in Geneva in 1929, at the onset of the Great Depression – and completed it in 1938, by which point the League had become irrelevant. Central banking offers several telling examples. In the 1930s, the then-privately owned Bank of England undertook a major reconstruction, designed by the architect Herbert Baker. The project, completed in 1939, coincided with the Bank's loss of credibility following its policy failures during the Great Depression. By 1946, its critics had succeeded in nationalizing it. Similarly, the German government built a new headquarters for the Reichsbank between 1933 and 1938, just as the institution was being transformed into an instrument of government spending and rearmament. By contrast, the most independent central banks of the postwar era occupy modest buildings: the Swiss National Bank remains in its original quarters, while the German Bundesbank still operates from an unattractive Brutalist structure built in the 1960s. The European Central Bank broke with that tradition. Its striking Frankfurt headquarters – designed by the architectural firm Coop Himmelb(l)au and completed in 2014 – was intended to embody 'transparency, communication, efficiency, and stability.' But a year later, the ECB launched a major quantitative easing (QE) program with little transparency, rendering the gleaming new building a symbolic substitute for policy effectiveness. During the COVID-19 pandemic, central banks around the world pursued QE, triggering a renewed surge in asset purchases. This significantly expanded their balance sheets and set the stage for structural challenges, particularly in the UK and the US: having taken on large amounts of long-term debt, central banks became vulnerable to substantial losses when interest rates rose. This risk can be managed through a formal government guarantee, as in the UK, where the Treasury explicitly covers the BOE's portfolio losses. Alternatively, it can be addressed through an implicit understanding, as in the US, where it is universally assumed that the Fed will never be allowed to fail. At the same time, government deficits widened, prompting a shift toward short-term debt and leading to a sharp rise in servicing costs. In the US, interest payments on the national debt increased from $223 billion in 2015 to $345 billion in 2020. This figure is projected to exceed $1 trillion in 2026 – surpassing even the defense budget. The UK's numbers are similarly striking, with £110 billion ($147 billion) of the £143 billion total borrowing requirement allocated to servicing existing debt. Governments and central banks thus find themselves increasingly interdependent, undermining the notion of true policy autonomy. The US, where the codependence between the government and the Fed lies at the heart of today's policy malaise, is a prime example. In this regard, Trump's aggressive rhetoric is likely a preview of how future administrations may behave. Treasury Secretary Scott Bessent highlighted these tensions when he calledfor an inquiry into the 'entire Federal Reserve institution.' In a post on X, he warned that the Fed's policy autonomy 'is threatened by persistent mandate creep into areas beyond its core mission.' The phrase 'mandate creep' is another way of describing the entanglement between monetary and fiscal authorities, both operating within the constraints of a single, increasingly burdened government balance sheet. Bessent's remarks, while historically accurate, offered no path forward short of aggressive fiscal consolidation – a politically implausible solution. Architecture offers a symbolic lens through which to view the evolving relationship between governments and central banks. Notably, while the Trump administration criticizes the scale and opulence of the Fed's renovation, it is also planning a costly construction agenda of its own. One of Trump's first acts upon returning to the White House was to call for the redesign of federal buildings to 'respect regional, traditional, and classical architectural heritage,' aiming to 'uplift and beautify public spaces and ennoble the United States and our system of self-government.' Is the federal government, then, falling prey to Parkinson's law? Should the obsession with neoclassical architecture be seen as a sign that the administration has entered its late-Louis XIV phase, characterized by extravagance and fiscal peril? All signs point in that direction. Harold James is Professor of History and International Affairs at Princeton University. A specialist on German economic history and on globalization, he is a co-author of The Euro and The Battle of Ideas, and the author of The Creation and Destruction of Value: The Globalization Cycle, Krupp: A History of the Legendary German Firm, Making the European Monetary Union, The War of Words, and, most recently, Seven Crashes: The Economic Crises That Shaped Globalisation (Yale University Press, 2023). Copyright: Project Syndicate, 2025.
Ammon
7 hours ago
- Ammon
Oil pauses rally as markets weigh Trump's ultimatum to Russia
Ammon News - Oil prices took a breather in Asian trade on Wednesday after the previous session's spike of more than 3%, as investors awaited developments from U.S. President Donald Trump's tighter deadline for Russia to end the war in Ukraine. Most active Brent crude futures rose 8 cents, or 0.12%, to $71.81 a barrel by 0419 GMT, while U.S. West Texas Intermediate crude gained 8 cents, or 0.12%, to $69.29 a barrel. The Brent crude September contract expiring on Wednesday was up 18 cents at $72.69 per barrel. Both contracts had settled on Tuesday at their highest since June 20. On Tuesday, Trump said he would start imposing measures on Russia, such as secondary tariffs of 100% on trading partners, if it did not make progress on ending the war within 10 to 12 days, moving up from an earlier 50-day deadline. On Tuesday, the International Monetary Fund raised global growth forecasts slightly for 2025 and 2026, but warned the world economy faced major risks, such as a rebound in tariff rates, geopolitical tension and larger fiscal deficits. Reuters
