Gold approaches $5600 amid increased demand for safe-haven assets

Gold reached a new record high on Thursday, approaching the $5,600 per ounce mark, as investors sought refuge from escalating geopolitical tensions and weakening economic signals in the United States, UNN reports with reference to Reuters.

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Silver also benefited from the flight to safe-haven assets, jumping above the $120 level.

Spot gold rose 2.2% to $5,516.71 per ounce by 09:47 GMT (11:47 Kyiv time), after reaching a record high of $5,594.82 earlier in the day. The metal, which has hit record highs for nine consecutive sessions, is on track for a 28% gain since the beginning of the month.

US gold futures for February delivery jumped 4% to $5,509.60 after earlier reaching an all-time high of $5,626.80.

Since the beginning of the year, gold has risen by more than 27%, as uncertainty in US policy, coupled with heightened geopolitical tensions and economic uncertainty, has prompted investors to seek refuge in the precious metal.

"The perfect storm for gold continues: geopolitical tensions between the US and Iran, a weak dollar, and market expectations of further Fed interest rate cuts are pushing prices to endless record highs," said Jamie Dutta, market analyst at Nemo.money, adding that strong inflows into ETFs also contributed to the rise.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, reported that its holdings rose to 35,043,181 ounces on Wednesday, reaching their highest level since May 2022.

On the geopolitical front, Trump on Wednesday called on Iran for nuclear deal talks, warning that the US would respond more harshly than in last year's attack on Iranian nuclear facilities.

Tehran responded with a threat of retaliatory measures against the US, Israel, and their allies.

On the political front, the US Federal Reserve kept interest rates unchanged on Wednesday, and investors are now awaiting Trump's announcement of a new Fed chair and predicting the next interest rate cut in June.

The US dollar remains in a volatile position after hitting a four-year low on Tuesday following comments by Trump, who downplayed the significance of the dollar's recent weakening. A weaker dollar makes gold, which is priced in dollars, more attractive to foreign buyers.

Amid the uncertain geopolitical and economic situation, "further growth (of gold) is possible, which could rise above the $6,000 level and, after a period of consolidation, approach $7,000 by the end of the year," said ActivTrades analyst Ricardo Evangelista.

Among other precious metals, spot silver rose 0.7% to $117.42 per ounce after earlier reaching a record high of $120.45. The metal has risen almost 64% since the beginning of the year, as investors seek to diversify their portfolios away from gold, with persistent supply shortages and impulse buying providing additional support.

"The silver squeeze means that the $130 level is already close, and long-term industrial demand supports it," Dutta added.

Spot platinum rose 1.8% to $2,743.80 per ounce after reaching a record high of $2,918.80 on Monday, while palladium fell 0.2% to $2,070.

Gold price reached $5591, and silver is trading near the $120 mark29.01.26, 06:34 • 4106 views