Don’t you know what happens to gold during a trade war? The reason why gold is more likely to rise when the global economy is experiencing uncertainty.
The recent trade war is heating up between the United States and China. The two superpowers are raising import tariffs on each other, tightening trade rules, and continuing to send signals of stress to global markets. This has caused the business world to falter and stock markets to wobble.
But in the midst of the global economic commotion why is gold shining more and more. So, what exactly happened to gold during the trade war? Why is it that gold can rise when the world is tense? Let’s take a look at the following 5 facts!
1. Gold as Asset Safety
What happens to gold during a trade war is that gold becomes an asset safety. Every time a trade conflict heats up, such as when the United States announces high import tariffs to countries, global stock markets usually drop dramatically.
When there are tensions such as trade wars, financial markets tend to be volatile. Stocks can plummet, currency exchange rates can weaken, and confidence in economic conditions can decline.
As a result, panicked investors will look for a safer place to store their money and gold becomes their escape to secure assets.
Well, this is where the answer to what happened to gold during the trade war gold was actually hunted because it was called a safe haven whose value tends to stabilize and even increase when the global economy is uncertain. When gold is hunted, it will cause a significant increase in the price of gold.
2. Central Banks Join the Hunt for Gold
You know, during a trade war not only investors hunt for gold but also central banks in various countries also start hoarding gold. So what happened to gold during the trade war was a huge surge in demand from various directions.
Central banks buy gold as a strategic move to reduce dependence on the American dollar and maintain the stability of the value of their foreign exchange reserves. That way the price of gold gets stronger when a trade war occurs. in addition to the increasing confidence in gold as a hedging tool even by large institutions.
3. Trade War Weakens Currencies
What happens to gold during a trade war is that the currency weakens. This weakening occurs due to various factors, such as economic policy uncertainty, decreased market confidence in the stability of the country, and a decrease in the volume of international trade.
For example, when the US dollar weakens, the price of gold, which is usually converted into dollars, becomes cheaper for international buyers using other currencies. This pushes global demand for gold through the roof.
So, what happens to gold during a trade war is not just the reaction of retail investors, but also a direct result of changes in world currency exchange rates that make gold even more attractive as a store of value and wealth protector.
4. Digital Gold is a Modern Investment Solution
Unlike physical gold, which requires storage, additional costs, and a relatively more complicated buying and selling process, digital gold offers greater convenience and flexibility.
When market conditions are volatile, many digital investment app users choose to add to their gold portfolio because they know gold can be a strong hedge.
With all its convenience, digital gold is a relevant and adaptive solution to what happened to gold during the trade war. As geopolitical tensions heat up and traditional markets come under pressure, digital gold allows modern investors to stay in control of their finances.
Instead of having your money eroded by inflation or being confused by the ups and downs of the stock market, why not start investing in digital gold today? What happened to gold during the trade war is a strong reminder that this precious metal is still a safe bet in the midst of global economic storms.
You don’t have to wait to get rich-just start from Rp5,000 thousand through the Treasury application, you can protect the value of your wealth in a smart, simple, and contemporary way. Let’s start today!
