Gold hit record highs in September, reaching over $3,700, and with Trump and US policies taking centre stage in the news, many are wondering how these changes will impact the U.S. dollar and, in turn, international economies.
Rick Kanda, Managing Director at The Gold Bullion Company, has shared how the U.S. dollar impacts the price of gold in the UK.
“Despite different currencies, the base currency for gold is almost always quoted in U.S. dollars per ounce. Therefore, the strength of the USD influences the price of gold, both nationally and internationally.”
“If the USD strengthens in comparison to the British pound, then UK gold prices will rise, and the U.S. will see gold prices fall, and vice versa if the USD weakens.”
How is the current US economic climate influencing UK gold prices?
“The first half of 2025 saw the USD experience the greatest depreciation since 1973, with its value falling by around 11% between January and June. In the same time frame, gold prices in the U.S. rose by over 25% and between July and September, these prices rose by a further 9%. There was a sudden spike in April, likely a result of the ‘Liberation Day’ tariff, which significantly weakened the strength of the dollar.”
“When we look at these prices in the UK, the first half of 2025 saw gold prices rise by 14% and have risen by a further 11% since the start of July. The recent rise in the gold price is most likely linked to the high possibility of interest rate cuts in the US this year.”
“However, with uncertainty still prominent when it comes to international tariffs and trade with the US, it is likely that the price of gold will fluctuate. However, if these policies don’t see the GBP depreciate, it could be a good opportunity for Brits to invest in gold.”
