Written by The Banking Post
Gold surged past the $5,200 mark for the first time on Wednesday, extending a powerful rally driven by a plunging US dollar, persistent geopolitical concerns and growing expectations of easier monetary policy in the United States.
Spot gold rose 1.1 per cent to $5,243.58 an ounce by early Asian trade, after touching a record $5,247.21. The metal has gained more than 20 per cent so far this year. US gold futures for February delivery jumped 3.1 per cent to $5,237.70 an ounce.
The rally gathered pace after the dollar slid to near four-year lows, weighed down by a crisis of confidence and renewed selling pressure. President Donald Trump’s remarks on the currency — suggesting a preference for a weaker dollar — further unsettled markets.
Market analysts said gold’s strong inverse relationship with the dollar amplified the move. “The surge reflects gold’s very strong indirect correlation with the dollar. Recent remarks from the White House have reinforced expectations of a weaker greenback, pushing prices higher,” said Kelvin Wong, senior market analyst at OANDA.
Adding to the bullish momentum, US consumer confidence fell to its lowest level in more than 11 years in January, reflecting concerns over a slowing labour market and persistent inflation. Trump also indicated that he would soon announce his choice for the next Federal Reserve chair, predicting that interest rates would decline under new leadership.
Investment banks remain upbeat on bullion’s longer-term outlook. Deutsche Bank said gold could climb to $6,000 an ounce in 2026, citing sustained demand from central banks and investors seeking diversification into non-dollar and tangible assets.
The rally spilled over into other precious metals. Spot silver rose 1.9 per cent to $115.11 an ounce, having hit a record $117.69 earlier this week, and is already up nearly 60 per cent this year. Platinum advanced 2 per cent to $2,692.60 after touching a record $2,918.80, while palladium gained 1.4 per cent to $1,961.68 an ounce.
