Gold prices have risen to a record level, as a new surge in the weakness of the US dollar, criticism of the Federal Reserve by US President Donald Trump, and persistent fears about a trade war underpinned demand for the safe-haven asset, writes UNN with reference to Bloomberg.
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Bullion soared in price above $3385 per ounce, as the US currency fell to its lowest level since the start of 2024. Trump mused about firing Fed Chairman Jerome Powell, while also advocating for lower interest rates. Chicago Federal Bank President Austan Goolsbee warned against attempts to limit the monetary authority's independence.
"Dismissing Powell not only undermines the principle of central bank independence but also risks politicizing US monetary policy in a way that markets would find unsettling," said Christopher Wong, a strategist at Oversea-Chinese Banking Corp. If confidence in the Fed is questioned, it could undermine confidence in the dollar and accelerate flows into safe-haven assets, including gold, he said.
The precious metal has repeatedly soared to record levels this year, as the trade conflict has upset markets, undermining appetite for risky assets while also accelerating a rapid shift into safe havens. Holdings in bullion-backed exchange-traded funds have risen for the past 12 weeks, the longest streak since 2022. Central banks are also adding the metal to their reserves, supporting steady global demand.
Regarding trade, China warned that it opposes any party reaching an agreement at the expense of Beijing's interests, according to the country's Ministry of Commerce. Data due this week, including revised forecasts from the International Monetary Fund, could heighten concerns about a global slowdown.
Banks have become increasingly positive about the outlook for gold as this year's rally has grown stronger, the publication writes. This includes Goldman Sachs Group Inc. forecasting that the metal could reach $4000 by the middle of next year.
Spot gold rose 1.8% to reach $3385.36 an ounce and traded at $3383.67 at 11:33 in Singapore. The Bloomberg Dollar Spot Index fell 0.7%. Silver recovered early losses and moved higher, platinum was little changed in price, and palladium declined.