Gold price explodes! Geopolitical tensions cause uncertainty

Gold price explodes! Geopolitical tensions cause uncertainty

December 1, 2025 will not only bring the first snow in many regions, but also a bubbling rise in the price of gold. According to information from Huaseng Heng, the price rose by $158, a hefty increase of approximately 3.9%, taking the price of gold to $4,223.1. The triggers for this boom are clear geopolitical tensions between Taiwan and Japan and between China and the USA, particularly regarding the disputed island of Taiwan.

What is happening in the Far East? US President Trump is currently on the phone with Chinese President Xi Jinping about trade agreements and the situation surrounding Taiwan. This shows that the US and China continue to grapple with tensions and rivalries that impact not only regional stability but also global markets. Japan is no bystander: Japanese Prime Minister Sanae Takaichi reaffirmed the close relationship between Japan and the US, while at the same time China is putting pressure on other countries to take a clear position. The relationship between Japan and China has been strained because China has criticized Japan for violating international law and even issued travel warnings. In addition, certain products and films from Japan are banned in China.

A look at Taiwan

Taiwan itself, officially known as the Republic of China (ROC), is an architectural gem in East Asia, geographically located between the East and South China Seas. Shimano, Taiwan, with a population of approximately 23.9 million and a GDP that is among the 20th largest in the world, raises many questions. The island's political status remains controversial; The People's Republic of China claims Taiwan as part of its territory. However, Taiwan participates in international organizations under the name “Chinese Taipei” and has official diplomatic relations with 11 of 193 UN member states as well as the Holy See.

It is all the more surprising that Taiwan plans to increase its defense budget to 5% of GDP by 2030. At a time when fast-moving geopolitical developments are commonplace, this could mean that not only Taiwan itself, but also surrounding regions and international relations are heading towards a test of their stability.

The economic impact

Given the current uncertainties, the USA is also showing the first signs of weakness in the labor market. Major companies including HP, Verizon, Procter & Gamble, General Motors and Amazon have announced layoffs that could cost tens of thousands of jobs. The Federal Reserve is currently discussing interest rate policy, and the distribution of votes shows that there is great uncertainty. With a vote of 6:6, a reduction in interest rates could well be within the realm of possibility.

Key economic data such as PMI, ADP employment figures and weekly unemployment figures will be released next week, which could further influence the direction of the markets. For the gold market, this means that prices are expected to fluctuate between $4,100 and $4,375, depending on further developments in interest rate policy and geostrategic events.

In summary, it can be said that the geopolitical air sovereignty in East Asia is now also being felt in the Western markets. The developments surrounding Taiwan and the economic and political ties between China, Japan and the USA are probably one of the most exciting stories on the political and economic stage at the moment.

As always, it remains to be seen where the waves of international politics will rise next. The people of Taiwan and beyond are hoping for a peaceful resolution to the conflict, while Western markets also continue to respond closely to any movement.