Gold price movement: 5 factors to consider

Here are some events that have been pushing the gold prices around. 

Factor 1: Federal Reserve Chair Faces Criminal Referral

House GOP Representative Anna Paulina Luna has formally referred Federal Reserve Chair Jerome Powell to the Department of Justice for a criminal investigation, accusing him of perjury. This comes when Luna claims Powell misrepresented and cost overruns on the new renovations at the Federal Reserve’s Eccles Building and maintenance. Although Powell has denied all of these accusations, if this evidence is proven, then Powell could face up to 5 years in prison and fines. 

Factor 2: Russia-Ukraine Conflict Intensifies

The ongoing war between Russia and Ukraine continues to escalate, with over 400 drones and 24 missiles striking Ukrainian targets overnight, including civilian shelters in substations. 

All of these attacks led to a significant rise in casualties. Therefore, Norway and the Netherlands have pledged to supply missiles to Ukraine, while French companies plan to manufacture drones in Ukraine to support their defense efforts. 

In short, the majority are supporting Ukraine, which aims to end this conflict. Ceasefire talks between Russia and Ukraine are scheduled for July 24-25 in Turkey. 

Factor 3: Israel-Gaza 

Meanwhile, the Israel-Gaza conflict continues, with at least 60 Palestinians killed, and starvation is seen everywhere. As a result, other countries, including the UK, France, Italy, and Japan, issued a collective demand for an immediate ceasefire in the Israel-Gaza conflict. 

→ They want to press for de-escalation and a resolution to the ongoing violence.

Factor 4: Iran Signals Openness to Nuclear Talks

Iran has expressed willingness to engage in nuclear negotiations with Russia and China, signaling a potential shift in Tehran’s stance. This follows a fragile ceasefire with Israel and the US after US airstrikes targeted Iranian nuclear facilities. According to a Trump post earlier this morning, “Damages are very severe; they are destroyed,” while calling out CNN a fake news. 

Factor 5: Trade Talk 

U.S.-China discussions are reportedly leaning toward a positive side, with potential talks on Russian and Iranian oil trades on the table. Especially when China becomes the largest purchaser of Iranian oil. 

Meanwhile, trade talks with the European Union remain stalled, though both sides are eager to reach an agreement soon.

***Important***

To conclude, factors 1 and 2 are causing the gold prices to go upward, where factor 3 can partly contribute as long as the fight remains. Yet, if the ceasefire exists once again, then Factor 3 will become a factor to decrease the gold price. 

As for factor 4 and 5, these are paving some path for more certainty, which could also lead to gold prices declining as well.