On Wednesday, economic and geopolitical uncertainty pushed gold prices above $5,300 an ounce for the first time while markets absorbed the Federal Reserve’s latest interest rate decision.
Spot gold was up 2.2% at $5,301.60 an ounce by 2:40 p.m. ET (1940 BST), after hitting a record high of $5,325.56.
US February gold futures rose 4.3% to settle at $5,303.60.
“The rally in precious metals is kind of taking on a life of its own at this point,” said Peter Grant, vice president and senior metals strategist at Zenner Metals.
Gold remains overbought and susceptible to a correction, but strong buying interest during the push continues to favor upside, with the next target expected at $5,400, Grant added. The Fed kept interest rates on hold, citing solid economic growth and still-rising inflation, but gave little indication in its latest policy statement about when borrowing costs would fall again.
Christopher Waller, the candidate to replace Fed Chairman Jerome Powell, whose term as head of the central bank expires in May, and Governor Stephen Milan, who is on leave as White House economic adviser, both voted against cutting rates by a quarter of a percentage point.
“The market is just fluctuating after the Fed statement… There is no suggestion that the Fed is in a hurry to move again,” said Tai Wong, an independent metals trader.
Powell said inflation in December was likely still well above the central bank’s 2% target. US President Donald Trump said on Tuesday that he would soon announce the choice to replace Powell.
Gold, a safe haven asset that does not yield interest, typically performs well during periods of low interest rates. It has risen more than 20% since the beginning of the year, building on last year’s record rise. Meanwhile, crypto group Tether plans to allocate 10% to 15% of its investment portfolio to physical gold, CEO Paolo Ardoino said, adding to the bullion that already backs some of its products.
Spot silver rose 0.7% to $113.78 an ounce after hitting a record high of $117.69 on Monday. Prices have increased nearly 60% so far this year.
Analysts at Standard Chartered said: “A number of silver indicators suggest a near-term correction in prices is possible.”
Spot platinum, which hit a record high of $2,918.80 on Monday, fell 1% to $2,612.81, while palladium rose 3.9% to $2,009.69.
(Reporting by Anmol Choubey and Ashita Sivaprasad in Bengaluru; Editing by Shailesh Kuber, Emelia Sithole-Matarise and Leroy Leo)
