Gold Regains Pressure—Is the $5,000 Target on the horizon?
Amidst intensifying risk-off sentiment, gold has retraced its peak and is trading around US$4,595/ounce, near its record high of US$4,600 hit on Monday. This rally isn't just a "safety trap," but a combination of three major risks: political, monetary, and geopolitical.
From the monetary side, the intense focus on the Federal Reserve has made the market uneasy about the central bank's independence. Once the market senses potential political interference, the dollar is easily shaken and interest rate volatility increases—two things that typically act as a "red carpet" for gold.
At the same time, expectations of looser policy remain alive. As the market assesses the possibility of a rate cut (although the pace may be slower), the opportunity cost of holding gold also falls—because gold offers no yield, but becomes more attractive when interest rates are expected to weaken.
From a geopolitical perspective, the focus, which had been on Venezuela, has now shifted back to Iran. Increasing protests and potential US involvement have added to uncertainty in the Middle East. For oil, the market often needs evidence of supply disruptions first; but for gold, a risky headline alone is enough to boost demand as a hedge.
This combination explains why investors seem reluctant to take profits even though prices have reached record levels: gold is currently at the crossroads of three factors. If political tensions—the Fed—and geopolitics remain heated, then the psychological level of US$5,000 becomes increasingly realistic as the next target—not because of a single trigger, but because all of them are igniting simultaneously.
Source: Newsmaker.id
