Gold Reclaims $5,000 as Market Awaits Fed Signals
Gold rallied again above $5,000 per ounce on Thursday, extending its surge of around 2% the previous day. The movement occurred in Asian trading, which was thin due to the Chinese New Year holiday, but "buy the dip" sentiment helped gold post a second day of gains.
The gold market remains volatile since the major turmoil at the start of the month, which pulled prices down from a record high above $5,595. Investors' focus now turns to the Fed's interest rate decision, after minutes of its January 27-28 meeting showed officials appeared more cautious about cutting rates immediately. This dynamic also has the potential to generate political pressure, given that Donald Trump has pushed for lower borrowing costs—which typically supports gold because it offers no yield.
Meanwhile, the US dollar held firm after being boosted by economic data that confirmed the resilience of the United States. Industrial production rose by the most in nearly a year, while core capital goods orders increased more than expected, sending the Bloomberg Dollar Index up 0.5% on Wednesday and flat on Thursday.
While the dollar and yields could act as short-term support, several major banks believe gold's uptrend is not over. They highlight medium-term supporting factors such as concerns about the Fed's independence, a shift in investor interest away from currencies and bonds, and rising geopolitical tensions that are bolstering safe-haven demand.
The market is also monitoring developments in the Middle East, where US-Iran nuclear talks have yet to produce a breakthrough. Following negotiations in Geneva, US officials said Iran would return in two weeks with detailed proposals, while US media reports suggested that in the event of an attack, military operations could potentially last for weeks.
In recent trading, spot gold rose 0.8% to $5,017.88 per ounce in Singapore. Silver jumped 2.5% to $79.16, while platinum and palladium also strengthened. (asd)
Source: Newsmaker.id
