Financial Panorama

Gold prices: why did they rise so sharply in 2025?

This situation implies that if investors are compensated for inflation, there is no need to protect against currency devaluation. To take a concrete example, consider the case of Argentina. In that country, inflation has long been at unsustainable levels and successive governments have printed large amounts of money: the value of the currency is constantly falling and consumers’ purchasing power has greatly diminished. For many years, a good number of residents of Latin American countries have preferred to stockpile U.S. dollars to protect themselves from the poor fiscal and monetary policies of their respective governments.

Driven by a return of manufacturing to the United States and an increase in exports, the U.S. administration believes that the U.S. dollar must lose value in order to make these manufactured goods more competitive on international markets. It is this change, in large part, that is driving gold prices up, in addition to geopolitical uncertainty and purchases by central banks around the world seeking, to some extent, to reduce their U.S. dollar reserves. For some of these banks, it’s also a matter of protecting themselves against a possible seizure of their reserves in the event of a conflict, as was the case during the invasion of Ukraine, when sanctions led to the freezing of some $300 billion belonging to Russia.

Central banks on the defensive

On October 29, the Bank of Canada (BoC) and the U.S. Federal Reserve (Fed) cut their respective policy rates by 0.25%. The Canadian economy has slowed and job growth since the beginning of the year has been weak, but the country has not entered a recession.

The scenario is much the same in the United States, where job creation is stagnating, which has allowed the Fed to also lower its rates, despite higher inflation.

Between now and the end of the year, Canada is expected to hold back and maintain a wait-and-see stance, with markets remaining ambivalent about a further cut in December.

Employment in Canada continues to rebound

The addition of 66,600 jobs in October far exceeded expectations, which were for a loss of 5,000 jobs. Last month’s positive trend continued, but in October it was mainly part-time jobs that boosted the labour market, unlike last month. The unemployment rate fell to 6.9% and wage growth remains strong at 4%. The manufacturing sector added 8,700 jobs, suggesting that the economy is still managing to grow despite tariffs.

Supreme Court ruling on tariffs

On November 5, the U.S. Supreme Court heard arguments from various parties regarding the U.S. administration’s use of a 1977 law to impose tariffs arbitrarily. The judges appeared skeptical of the government’s arguments. A ruling will be issued by next summer.

A decision against the U.S. administration would not necessarily mean the abolition of all tariffs: however, it would require a different legal process to impose them, which would limit the power of government authorities to set tariffs as they see fit.

The U.S. government shutdown – take 2

After more than 40 days of shutdown, U.S. public services are expected to resume normal operations. Among other things, this return to normal means that federal statistical data, such as those concerning non-farm job creation, should soon be available.