The $5,000 level is within sight!
Gold prices surged above $4,950 per ounce on Friday, setting a new record and poised to close the week with their strongest gains since March 2020. The main driver came from a combination of a weakening dollar and global uncertainty, which has investors seeking safe havens.
From a geopolitical perspective, President Donald Trump claimed to have secured permanent US access to Greenland through a deal with NATO, although details remain unclear. Denmark reasserted its sovereignty over the territory, leading the market to believe the issue is not truly resolved and still has the potential to trigger a new wave of uncertainty.
On the trade front, Trump also canceled planned import tariffs on Europe, while the European Union announced it would delay previously planned retaliatory measures. However, Europe is still awaiting clarity on Trump's next policy direction, and this uncertainty is contributing to the high interest in gold.
From economic data, the Fed's preferred inflation rate (PCE), both headline and core, rose as expected. This signals that the process of inflation reduction is still ongoing, although economic activity remains quite strong. The market currently expects two interest rate cuts by the Fed this year—a situation that typically supports gold as it makes yields on interest-bearing assets more attractive.
Investors are also awaiting Trump's decision on the next Fed chair after he completes his round of candidate interviews. If the choice falls on a more dovish figure, expectations of interest rate cuts could grow—and that could potentially provide additional fuel to gold's already record-breaking rally. (asd)
Source: Newsmaker.id
