Gold Regains Above $5,000, Traders Choose to "Buy the Dip"
Gold continued its rally and held above $5,000/oz for a second day, as a weaker dollar extended the safe-haven rally. The spot price of XAU/USD was seen around $5,054/oz (bid/ask in the $5,053–$5,055 area), up approximately +0.9% from the previous close.
The boost came from the dollar's weakening to its lowest level in nearly four years, amid speculation that the US could contribute to the yen's strengthening. At the same time, the market was also digesting Trump's threat to increase tariffs on South Korean goods—renewing uncertainty.
This gold rally is considered a reflection of the "debasement trade": investors are starting to move away from currencies and government bonds, allowing precious metals to once again become a safe haven. The recent heavy sell-off in the Japanese bond market has reinforced the narrative that the market is increasingly sensitive to fiscal risks.
A series of US foreign policy maneuvers have also made the market susceptible to shock—from issues in Greenland and Venezuela to concerns about central bank independence. After a weekend of pressure on Canada with the threat of significant tariffs, attention has now shifted to South Korea, keeping the risk premium from completely disappearing.
In other metals, silver also surged. XAG/USD was seen around $109.80/oz, up around 5.7% from the previous close, although it had retreated from last session's record high.
The options market also showed signs of heating up: implied volatility on Comex gold contracts is said to have reached its highest level since the peak of the Covid-19 outbreak, and market participants are tending to buy on small corrections rather than against the trend. The next focus: the Fed's decision on Wednesday and the direction of Trump's chosen candidate for the next Fed chair. (asd)
Source: Newsmaker.id
