Buy the Dip, Gold Reclaims $5,000
Gold prices rose again, breaking through $5,000 per ounce, after dip buyers entered the market after a highly volatile week. In early Asian trading, spot gold strengthened by 1.7% to hover around $5,028 per ounce, while silver also rose.
This rise was also aided by sentiment from Japan. Prime Minister Sanae Takaichi's landslide victory reinforced market confidence in the direction of looser fiscal policy, while the yen remained under pressure. Such conditions typically make gold more attractive as a "store of value" when currencies weaken.
Previously, the precious metal had fallen sharply from its record high in late January, after a major rally that was considered too fast and too far. As of Friday, gold was still down about 11% from its January 29 peak, but year-to-date, it was still up about 15%. Some even believe yesterday's wild swings were triggered by speculative activity, including concerns that Chinese traders were fueling the wave.
While still choppy, gold has roughly halved its post-rout decline, supported by long-term demand. Recent data showed China's central bank continued gold purchases for the 15th consecutive month, underscoring the continued strength of official demand. Looking ahead, the market will focus on US economic data—particularly the January jobs report (Wednesday) and inflation data (Friday)—to gauge the direction of the Fed's interest rates. The Fed's independence also comes into play after Kevin Warsh reiterated the need for a new agreement between the central bank and the US Treasury Department. (asd)
Source: Newsmaker.id
