Gold Breaks $4,800!
Gold prices surged again in Asian trading this morning, breaking through the $4,800 per ounce level. This surge occurred as global markets entered a "safety zone" mode, fueled by escalating geopolitical tensions and renewed concerns in the bond market.
The biggest trigger came from the worsening Greenland crisis. The US threat of tariffs against several European countries over the Greenland issue led investors to assess the risk of a trade war as increasingly real. When trade tensions escalate, markets typically immediately reduce their share of risky assets like stocks and shift to safe haven assets, with gold being the primary choice.
What fueled the gold rally was the weakening US dollar. In this situation, the dollar's weakening occurred because market concerns stemmed from US policy itself, leading some investors to reduce their exposure to dollar assets. When the dollar fell, gold (priced in dollars) automatically became cheaper for buyers using other currencies, thus boosting demand.
On the other hand, the market was also shaken by volatility in Japanese government bonds (JGBs). The volatility in JGB yields raised larger concerns: the fiscal conditions of developed countries and the stability of global debt markets. When bonds—usually considered "safe"—involved in volatility, investors sought a haven independent of default risk or government policy. Gold often became the answer when "stocks are down, bonds are not comfortable either."
The combination of Greenland, a weakening dollar, and volatile JGBs gave rise to an increasingly discussed theme: the "debasement trade." Essentially, some investors began to perceive the risk of currency depreciation and declining confidence in government bonds as increasing, leading them to choose physical assets like gold and silver as a hedge.
Risk-off pressures were also evident in the weakening stock market performance, particularly in interest-rate-sensitive stocks and growth stocks. When stocks are depressed and bonds are volatile, capital flows into precious metals typically increase as investors seek the most "neutral" defensive alternative.
Another factor contributing to the rally was expectations of US interest rate policy. When the market perceives the possibility of a rate cut remaining open, gold's appeal increases because the opportunity cost of holding non-yielding bullion becomes lower. Furthermore, speculation about central bank policy directions and political dynamics often leads investors to "park" gold until uncertainty subsides.
After a new record is set, price movements also tend to accelerate due to psychological factors and speculative positioning. When a key level is broken, a large number of follow-up orders and bandwagon activity (FOMO) can cause the price to "jump" quickly—which often occurs when gold enters a new price range.
Going forward, the market will be monitoring two main factors: Europe's response to the Greenland-related tariff threat and the direction of comments from US officials that could potentially alter risk perceptions. If geopolitical tensions ease or the bond market stabilizes, gold could experience a technical correction. However, as long as uncertainty remains high, gold has the potential to remain strong—for a simple reason: investors are buying "safety." (mrv)
Source: Newsmaker.id
(asd)
Source: Newsmaker.id
