Global Trade War Triggers Inflation and Surge in Gold Prices
Key Developments:
- Tariff Impositions and Retaliation: The United States has imposed tariffs ranging from 10% to 25% on imports from China, Europe, and Mexico. In response, these countries have introduced counter-tariffs on U.S. imports, escalating a global trade conflict.
- Rising Inflation and Investment Shift: The retaliatory measures have contributed to a new wave of global inflation, prompting investors to seek refuge in gold. This increased demand has pushed gold prices to record levels globally and in Pakistan.
- Gold Price Surge: Over the past week, the price of gold per ounce increased by $74, reaching an all-time high of $2,984. Correspondingly, local gold prices have surged, with one tola rising by Rs7,700 to a historic high of Rs313,700, while 10 grams of gold increased by Rs6,602 to Rs268,947.
- Silver Price Increase: Silver has also seen a price rise, with one tola increasing by Rs142 to Rs3,530 and 10 grams by Rs122 to Rs3,026.
- Currency Shift and De-dollarization: Countries including Russia, China, and India are shifting their foreign exchange reserves from dollars to gold due to concerns over potential devaluation linked to a stronger U.S. dollar. Some nations are even exploring the possibility of introducing a new global currency to reduce reliance on the dollar.
The ongoing trade war and inflationary pressures have accelerated a shift in global investment trends, driving gold prices to historic highs. With several nations reducing their dollar holdings in favor of gold, economic power dynamics may be shifting, potentially leading to long-term changes in the global financial system. The move towards de-dollarization could further reshape international trade and monetary policies in the future.
