Gold Extends Its Historic Rally, Surpassing $5,200
Along the same lines, spot silver jumped 7.75% to $114.20 per ounce, after reaching a record high of $117.69 on Monday.
Quick overview
- Gold has reached record highs, currently priced at $5,260 per ounce, driven by a decline in the U.S. dollar and geopolitical concerns.
- Silver, platinum, and palladium are also experiencing significant gains, with silver up nearly 60% year-to-date.
- The U.S. dollar's weakness is a key factor in gold's surge, influenced by recent comments from Donald Trump and declining consumer confidence.
- Uncertainty in the U.S. economy is growing, particularly regarding the Federal Reserve's interest rate decisions and potential leadership changes.
Like the yellow metal, silver, platinum, and palladium are also posting strong gains.
Gold has once again reached record highs amid a sharp decline in the U.S. dollar to near four-year lows, driven by persistent geopolitical concerns and ahead of the U.S. Federal Reserve’s (Fed) upcoming monetary policy decision.
In that context, gold is up 3.5% at $5,260 per ounce after hitting an all-time high of $5,266.37. The metal has risen more than 20% since the beginning of the year.
Along the same lines, spot silver jumped 7.75% to $114.20 per ounce, after reaching a record high of $117.69 on Monday. The white metal is up nearly 60% year-to-date. Spot platinum advanced 1.7% to $2,685.16 per ounce after touching a record $2,918.80 on Monday, while palladium gained 0.7% to $1,946.75.
Dollar weakness, the key driver behind gold’s surge
The rally in gold is largely explained by its strong inverse correlation with the U.S. dollar. Recent comments by Donald Trump in response to an informal question about the dollar suggest a broad consensus within the White House in favor of a weaker greenback going forward.
U.S. consumer confidence plunged in January to its lowest level in more than 11 and a half years, while the dollar has fallen to its weakest level in four years.
At the same time, uncertainty is building in the U.S. economy amid tensions at the Fed, which is expected to keep interest rates unchanged in January, and speculation surrounding Trump’s potential appointment of a new Fed chair to replace Jerome Powell.
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