Gold advanced to a new record high near the US$5,600-an-ounce level on Thursday, as investors sought refuge from escalating geopolitical tensions and weakening economic signals in the United States.
Silver also benefitted from the flight to safety, leaping above the US$120 level.
Spot gold rose 2.2% to US$5,516.71 an ounce by 0947 GMT, after hitting a record US$5,594.82 earlier in the day. The metal, which has hit record highs for nine straight sessions, was set for a 28% rise for the month so far.
US gold futures for February delivery jumped 4% to US$5,509.60 after hitting an all-time high of US$5,626.80 earlier.
Bullion has gained more than 27% so far this year as policy uncertainty in the United States, coupled with elevated geopolitical tensions and economic uncertainty, have prompted investors to seek safety in the yellow metal.
“Gold’s perfect storm continues with US-Iran geopolitical tensions, a weak dollar and market expectations of more Fed rate cuts driving prices to endless record highs,” said Jamie Dutta, market analyst at Nemo.money, adding that strong ETF inflows have also contributed to the rally.
SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, said its holdings on Wednesday rose to 35,043,181 ounces, its highest since May 2022.
On the geopolitical front, Trump pressed Iran on Wednesday to negotiate a nuclear deal, warning that the US would respond more forcefully than it did in last year’s attack on Iranian nuclear facilities.
he US dollar remained on shaky ground, after it hit a four-year low on Tuesday following Trump’s comments brushing off its recent weakness. A weaker dollar makes greenback-priced bullion more attractive to overseas buyer.
Against an uncertain geopolitical and economic backdrop, “further gains are possible for (gold) which could rise above the US$6,000 level and, after a period of consolidation, move towards US$7,000 by year-end,” said ActivTrades analyst Ricardo Evangelista.
Among other precious metals, spot silver was up 0.7% at US$117.42 an ounce after hitting a record high of US$120.45 earlier. The white metal has gained nearly 64% so far this year as investors look to diversify out of gold, with persisting supply deficits and momentum buying providing further support.
Source: Theedgemalaysia