Gold prices broke past $4,500 in Asian trade on December 24 on optimism that the Federal Reserve will continue cutting interest rates next year, and amid rising tensions between the United States and Venezuela.
The price of gold hit fresh records Monday after reaching $5,000 an ounce for the first time on rising global uncertainty and turmoil set off by US President Donald Trump’s policies.
Gold reached $5,111.07 an ounce, having topped the key landmark in Asian trading hours.
“It vaulted over the psychologically important 5,000 mark on a glittering streak, heading sharply higher as trade tensions emanating from the US, unnerved investors,” noted Susannah Streeter, chief investment strategist at Wealth Club.
“The dollar’s decline is part of the story,” she added as the US unit slumped against the yen Monday.
“The greenback has taken another hit as concerns continue to swirl (around) the impact of tariffs, high government spending, and inflation on the US economy, prompting investors to recalibrate their exposure to the US.”
Sister metal silver struck an all-time peak above $110 an ounce on Monday.
Surging Gold Since 2024
While turbulence over Trump’s ambitions for Greenland and pressure on the Federal Reserve have provided the most recent support for gold, the precious metal has, for two years, achieved all-time peaks on factors ranging from strong central bank demand and elevated inflation.
Gold traded at just above $2,000 an ounce in January 2024.
The precious metal’s price has also risen due to the wars in Ukraine and Gaza, as well as Washington’s intervention in Venezuela.
“Gold has not been marching higher because of daily drama,” according to independent analyst Stephen Innes “It has been repriced because investors are slowly recalibrating what stability costs in a world drowning in debt.”
Fears of a fresh US government shutdown — and Trump threatening Canada with 100 per cent tariffs should its neighbour conclude a trade deal with China — helped gold begin the new week with fresh records, analysts said
“Gold soared past the $5,000 mark for the first time, fuelled by its appeal as a safe-haven asset,” said Patrick Munnelly, a market strategist at Tickmill Group.
“The dollar took a hit against most major currencies as concerns grew over potential American intervention in Japan’s foreign exchange market, dampening sentiment toward the global reserve currency.”
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Investors were additionally preparing for this week’s Federal Reserve policy meeting, which comes after US prosecutors took aim at its boss, Jerome Powell, raising fears over the bank’s independence.
The heads of major central banks have thrown their support behind the Fed and Powell, after US prosecutors issued subpoenas against him that threaten a criminal indictment.
Gold demand by value jumped 44 percent year-on-year to a record $146 billion in the third quarter of last year, the World Gold Council has said in its latest report.
There has been strong demand for gold also via Exchange-Traded Funds on stock markets. ETFs allow investment without trading on the gold futures market.
AFP
