Gold topped $5,200 for the first time on Wednesday after rising more than 3% on Tuesday as the dollar fell to its lowest in nearly four years amid lingering geopolitical concerns ahead of the US Federal Reserve’s monetary policy decision.
Spot gold rose 1.1% to $5,243.58 an ounce as of 0314 GMT, after earlier hitting a record high of $5,247.21, up more than 20% since the beginning of the year.
U.S. gold futures for February delivery rose 3.1% to $5,237.70 an ounce.
Kelvin Wong, senior market analyst at OANDA, said: “(Gold’s rise) is due to its very strong indirect correlation with the dollar, and yesterday’s rise in gold prices in the US Congress was due to President Trump’s comments in response to a casual question about the dollar, suggesting there is a broad consensus within the White House that the dollar will be weaker going forward.”
The U.S. dollar is facing a “crisis of confidence” and is struggling near four-year lows, with dollar selling intensifying. This comes after President Donald Trump said the value of the U.S. dollar was “fantastic” when asked if he thought it had fallen too much.
Meanwhile, U.S. consumer confidence fell to its lowest level in more than 11-and-a-half years in January amid growing concerns about a weak labor market and rising prices.
President Trump added that he would soon announce the selection for the head of the U.S. central bank, and predicted that interest rates would fall once the new chairman takes office.
The Federal Reserve is widely expected to keep interest rates unchanged at its current January monetary policy meeting.
Wong added that short-term resistance for gold could be seen around $5,240 an ounce. Deutsche Bank said on Tuesday that gold prices could rise to $6,000 an ounce in 2026, citing strong investment demand as central banks and investors increase allocations to non-dollar and tangible assets.
Spot silver rose 1.9% to $115.11 an ounce, after hitting a record high of $117.69 on Monday. The white metal is already up about 60% so far this year.
Spot platinum rose 2% to $2,692.60 an ounce after hitting a record high of $2,918.80 on Monday, while palladium rose 1.4% to $1,961.68.
(Reporting by Ishaan Arora in Bengaluru; Editing by Alan Barona and Rashmi Aich)
