Gold surged past the $5,200 mark for the first time on Wednesday and briefly approached $5,300, as the U.S. dollar slid to a near four-year low amid ongoing geopolitical uncertainty and ahead of a key monetary policy decision by the Federal Reserve.
Spot gold jumped 1.8% to $5,279.94 an ounce by 07:33 GMT, after reaching an all-time high of $5,285.35 earlier in the session. The precious metal has now gained more than 20% since the start of the year.
U.S. gold futures for February delivery rose even more sharply, surging 3.8% to $5,274.80 an ounce.
Kelvin Wong, a senior market analyst at OANDA, said gold’s rally reflects its strong inverse relationship with the dollar. He added that recent comments from U.S. President Donald Trump suggested a broader acceptance within the White House of a weaker dollar policy going forward.
The dollar has struggled near four-year lows, facing what some analysts described as a growing crisis of confidence. Selling pressure intensified after Trump said the dollar’s value was “great” when asked whether it had fallen too much.
Adding to market unease, U.S. consumer confidence dropped to its lowest level in more than 11 years in January, as concerns mounted over a cooling labour market and persistently high prices.
Trump also said he would soon announce his nominee to lead the Federal Reserve and predicted that interest rates would fall once a new chair takes over.
Ilya Spivak, head of global macro at Tastylive, said markets appear increasingly defensive ahead of comments later in the day from Fed Chair Jerome Powell, citing tension between the central bank’s mandate and pressure from the White House.
The Federal Reserve is widely expected to keep interest rates unchanged at its January policy meeting, which is currently underway.
Wong noted that near-term technical resistance for gold could emerge around the $5,240-per-ounce level. Meanwhile, Deutsche Bank said on Tuesday that gold prices could reach $6,000 an ounce by 2026, driven by sustained investment demand as central banks and investors increase exposure to non-dollar and tangible assets.
Other precious metals also advanced. Spot silver gained 0.9% to $114.01 an ounce, after hitting a record $117.69 earlier in the week, and is up nearly 60% so far this year.
Platinum rose 1.7% to $2,686.50 an ounce after reaching a record $2,918.80 on Monday, while palladium climbed 1.3% to $1,959.43.
