HOT MOMENTS: Gold Surpasses $5,300 – What’s Going On? Here Are Analysts’ Expectations
Gold prices hit a record high, surpassing $5,300 per ounce for the first time, driven by a weakening US dollar and rising economic uncertainty. Investors awaited the Federal Reserve’s policy decision, while concerns about the institution’s independence also fueled demand for safe-haven assets.
Spot gold was trading at $5,293.48 at the time of writing, up 2.2 percent. Prices reached an all-time high of $5,311.31 earlier in the day. Gold had gained more than 3 percent in the previous session.
In the US, February gold futures contracts also rose 4 percent to $5,286.50.
The US dollar index (DXY) is trading near its lowest levels in about four years, while the rise has been supported by the fact that gold, priced in dollar terms, has become more attractive to foreign investors.
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Peter Grant, Vice President and Senior Metals Strategist at Zaner Metals, stated, “The rally in precious metals has now established its own dynamic.” Grant noted that gold is technically in overbought territory and may be open to a correction in the short term, but added that strong buying demand continues during pullbacks and the next target could be $5,400.
US President Donald Trump announced yesterday that he will soon reveal the name of the person who will replace Federal Reserve Chairman Jerome Powell, whose term ends in May, and that interest rate cuts may come under the new administration.
Gold, a safe-haven asset with no interest income, generally performs strongly in low-interest rate environments and periods of uncertainty. Gold prices have risen more than 20% since the beginning of the year, surpassing last year’s record gains.
Grant also said, “Individual demand remains weak due to record prices, but there is significant pent-up demand. Dealers are withdrawing from the scrap gold business due to congestion at refineries.”
Meanwhile, spot silver rose 1 percent to $114.13. Silver hit a record high of $117.69 on Monday and has gained approximately 60 percent since the beginning of the year.
*This is not investment advice.
Continue Reading: HOT MOMENTS: Gold Surpasses $5,300 – What’s Going On? Here Are Analysts’ Expectations
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