Khaberni - The president of Target Investment Company, Nour El Din Mohamed, said that the escalation of geopolitical tensions and successive trade wars are pushing global markets into an unprecedented wave of uncertainty, which enhances the strong demand for gold and precious metals as safe havens, in contrast to the decline in confidence in currencies and high-risk assets.
Mohamed added that the markets are witnessing consecutive updates of crises, starting from tensions with China and Canada and Venezuela, reaching to the escalating disputes with the European Union, noting that the current US customs duties of 10% are expected to increase to 25% by next June, increasing the pressure on the global trade system.
He explained that these developments have pushed gold price expectations to higher levels than before, noting that if the current situation continues, the price of an ounce may reach 5 thousand dollars during the first three months of the year, with the possibility of exceeding this level up to 6 thousand dollars before the end of the year.
He noted that the uncertainty does not only affect gold but extends to all precious metals, pointing to clear imbalances in pricing ratios, especially between gold and silver, where the ratio has currently dropped to about 50 times, compared to the historical average which ranges from 60 to 90 times, reflecting an abnormal disturbance in the markets.
He pointed out that silver has also experienced a strong surge, driven by fears of imposing restrictions or tariffs on it, leading to extensive storage operations, especially in the United States, contributing to a sharp increase in its prices.
He confirmed that the continuation of political tensions, including the crises of Venezuela and Greenland, supports the trend towards assets that preserve value, amid declining stock indices, falling digital currencies, and investors withdrawing from high-risk assets.
He mentioned that the current American policies, under the administration of President Donald Trump, enhance the state of global financial instability, driving investors and central banks to reduce exposure to American assets, and increase reliance on gold and safe havens, until geopolitical and trade conditions calm down.
