Gold price surpasses $5300 for the first time amid dollar's decline
Kyiv • UNN
The price of gold rose to $5305.65 per ounce, reaching a record high of $5311.31. This occurred as the dollar fell to a nearly four-year low ahead of the US Federal Reserve's decision.
Gold surpassed the $5300 mark for the first time on Wednesday, as the dollar fell to a near four-year low ahead of the US Federal Reserve's monetary policy decision, UNN reports with reference to Reuters.
Details
As of 08:32 GMT (10:32 Kyiv time), the spot price of gold rose by 2.3% to $5305.65 per ounce after reaching a record high of $5311.31. It has increased by more than 20% since the beginning of the year. US gold futures for February delivery jumped by 4.3% to $5301.90 per ounce.
The American dollar was experiencing a "crisis of confidence," hovering near four-year lows, which intensified the dollar sell-off after US President Donald Trump stated that the currency's value was "great" when asked if he thought it had fallen too much.
A weaker dollar makes gold, which is priced in dollars, more attractive to foreign buyers.
"(The rise in gold prices) is driven by a very strong inverse correlation with the dollar and... Trump's remark in response to a casual question about the dollar, which implied that there is a broad consensus in the White House for a weaker dollar going forward," said Kelvin Wong, senior market analyst at OANDA.
Trump also stated that he would soon announce his nominee for Fed chair and predicted lower interest rates once the new chair takes office.
"Given the tension between the Fed's mandates and the White House, I think markets are just taking a defensive stance ahead of (Fed Chair Jerome Powell's statements later today)," said Ilya Spivak, head of global macro at Tastylive.
The Fed is widely expected to keep interest rates unchanged at its January monetary policy meeting, which is currently underway.
Gold, which does not yield interest, typically performs well in a low-interest-rate environment.
On Tuesday, Deutsche Bank stated that gold could rise to $6000 per ounce in 2026, citing sustained investment demand as central banks and investors increase their holdings in non-dollar and tangible assets.
The spot price of silver rose by 1.5% to $114.68 per ounce after reaching a record high of $117.69 on Monday. The metal's price has jumped by almost 60% since the beginning of the year.
The spot price of platinum rose by 2.3% to $2703.11 per ounce after reaching a record high of $2918.80 on Monday, and the price of palladium rose by 2.2% to $1976.62.
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