Gold prices are surging again after Taiwan said China is preparing for war.
XAUUSD – Weekly Chart
XAUUSD – The price of gold now trades at $2,043 and is heading for the triple top formation with the 2020 and 2022 highs. However, that level also aligns with the 2021 highs around the $2,100 level.
(XAUUSD) Gold Price Prediction
If gold can push above $2,100 to all-time highs, the price would have room to fly higher.
Germany’s government has asked for reduced tensions over Taiwan after the country said China is preparing for war. The German foreign minister arrived in China for talks following Chinese military exercises near the island territory that Beijing lays claim to.
China’s ruling party sent warships and fighter planes toward Taiwan last weekend in retaliation to the visit of US House Speaker Kevin McCarthy. It is not the first time US visits have inflamed tensions with China, following deteriorating tensions between the countries after the “spy balloon” episode.
European governments are worried that China may seek to invade Taiwan when Western governments are stretched due to Ukraine. Taiwan is a major centre for high-tech products, such as semiconductors vital to US tech firms.
Key Drivers To Gold Prices – Central Banks
The other driver for gold has been substantial central bank purchases of the precious metal. In the first two months of 2023, Central Banks have bought as much as 125 tonnes of gold, according to the World Gold Council (WGC).
Singapore drew attention by purchasing 51 tonnes of gold in just two months. The largest buyers over the last year have been Turkey, which added 45.5 tonnes this year, and China, which bought 40 tonnes in 2023. Russia and China have also been large buyers; last year’s total for central banks was 1,136 tonnes.
