Gold reached an all-time high of $5,266.37 per ounce on Wednesday as the US dollar plummeted to near four-year lows amid ongoing geopolitical concerns ahead of a Federal Reserve monetary policy decision.
Spot gold surged 1.4 percent, closing at $5,262.66 per ounce by GMT 05:58, having previously hit an earlier record high of $5,266.37. Since the beginning of the year, it has climbed more than 20 percent.
US gold futures for February delivery jumped 3.4 percent to $5,255.30 per ounce.
According to Kelvin Wong, a senior market analyst at OANDA, the rise in gold was driven by its strong indirect correlation with the dollar and President Donald Trump’s remark about the greenback being “great” when asked if it had declined too much. He added that there is broad consensus within the White House for a weaker US currency.
The US dollar faced a “crisis of confidence,” grappling near four-year lows amid mounting anxiety over a sluggish labor market and rising prices. US consumer confidence dropped to its lowest level in more than 11 years in January, according to Trump’s comments on the topic.
President Donald Trump predicted that interest rates would decline once his chosen candidate for Fed Chair takes over. Ilya Spivak, head of global macro at Tastylive, noted defensive market behavior leading up to the remarks by current Fed Chair Jerome Powell later today. Despite expectations for no change in rates at the January monetary policy meeting, which is currently underway, Wong suggested that near-term resistance for gold could be around $5,240/oz.
Deutsche Bank stated on Tuesday that gold prices might reach $6,000 per ounce by 2026, citing continued investment demand as central banks and investors allocate more funds to non-dollar assets. The firm also pointed towards tangible resources as alternatives to the US dollar.
Spot silver rose 2 percent to $115.40 an ounce after reaching a record high of $117.69 on Monday. So far this year, it has surged almost 60 percent.
Platinum saw its value rise by 1.7 percent to $2,685.16 per ounce post a one-day record high at $2,918.80. Palladium also ascended by 0.7 percent, closing at $1,946.75.