Gold price prepares to challenge record level in the context of economic instability

August gold futures surged to $37.40, reaching $3,443.8 an ounce, the highest level since gold set a record of $3,452.8 an ounce on June 13. This significant increase reflects strong and stable demand in the gold market in recent months.

The current price increase is driven by a number of key market factors. The weakening USD makes gold more attractive to international investors, while falling US Treasury yields reduce the opportunity cost of holding non-yielding assets such as gold. The ICE USD Index fell 0.44 points to 97.42 - creating favorable conditions for USD-denominated goods.

At the same time, the bond market reflects investors' increasing cautious sentiment towards economic prospects. The yield on the 2-year bond fell 4.4 basis points to 3.836%, while the yield on the 10-year bond fell 4.5 basis points to 4.339%.

This development shows that the market expects to have adjustments to monetary policy and face economic obstacles in the coming time.

Central bank purchases along with safe-haven demand continue to support gold prices. Investors still see gold as a tool to diversify their portfolios in the context of rising geopolitical tensions and trade policy uncertainty.

Trade policy developments are currently a major catalyst for market sentiment. US President Donald Trump has said he will impose tariffs on most of his trading partners if they do not reach an agreement before August 1, creating a major wave of unrest in global trade.

The proposed 30% tax rate on imports from the European Union has prompted the EU to consider response measures, raising concerns about a large-scale trade war that could seriously affect the global economy.

The convergence of weak USD factors, falling bond yields, geopolitical tensions and trade instability have created a particularly favorable environment for gold.

As prices approach record highs, investors are closely monitoring whether these favorable conditions are strong enough to maintain upward momentum and bring gold above historical thresholds, trigger new buying waves and prolong the current price increase.