Gold yesterday surged to a record high of more than US$5,100 an ounce, extending a historic rally as investors piled into the safe-haven asset amid rising geopolitical uncertainties.
Spot gold were up 2.2 percent at US$5,089.78 per ounce by 6:56am GMT, after earlier touching an all-time high of US$5,110.50. US gold futures for February delivery also gained the same amount to US$5,086.30 per ounce.
The metal soared 64 percent last year, its biggest annual gain since 1979, driven by safe-haven demand, US monetary policy easing, robust central bank purchases including China’s 14th consecutive month of buying last month, and record inflows into exchange-traded funds.
Photo: AFP
Prices have set consecutive record peaks over the past week and have already risen more than 18 percent this year.
The latest catalyst “is effectively this crisis of confidence in the US administration and US assets, that was set off by some of the erratic decisionmaking from the Trump administration last week,” Capital.com senior market analyst Kyle Rodda said.
US President Donald Trump on Wednesday last week abruptly stepped back from threats to impose tariffs on European allies as leverage to seize Greenland.
Over the weekend, he said he would impose a 100 percent tariff on Canada if it followed through on a trade deal with China.
Trump has also threatened to hit French wines and champagnes with 200 percent tariffs in an apparent effort to pressure French President Emmanuel Macron into joining his Board of Peace initiative. Some observers fear the board could undermine the UN’s role as the main global platform for conflict resolution, although Trump has said it would work with the UN.
“This Trump administration has caused a permanent rupture in the way things are done, and so now everyone’s kind of running to gold as the only alternative,” Rodda added.
Meanwhile, a rising yen yesterday dragged the US dollar broadly lower, with markets on alert for possible intervention in the yen and investors cutting US dollar positions ahead of this week’s US Federal Reserve meeting.
A weaker dollar makes greenback-priced gold more affordable for holders of other currencies.
Analysts expect gold prices to climb further toward US$6,000 this year on mounting global tensions as well as strong central-bank and retail demand.
“We expect further upside [for gold]. Our current forecast suggests that prices will peak at around US$5,500 later this year,” Metals Focus director Philip Newman said.
“Periodic pullbacks are likely as investors take profits, but we expect each correction to be short-lived and met with strong buying interest,” Newman added.
Spot silver advanced 4.8 percent to US$107.903, after hitting a record of US$109.44. Spot platinum climbed 3.4 percent to US$2,861.91 per ounce, after hitting a record high of US$2,891.6 earlier in the session, while spot palladium was 2.5 percent higher at US$2,060.70, having touched a more than three-year high.
Silver climbed above the US$100 mark for the first time on Friday, building on its 147 percent rise last year as retail-investor flows and momentum-driven buying compounded a prolonged spell of tightness in physical markets for the metal.
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