Gold jumped to a record high above $5,500 an ounce, extending a breakneck rally fueled by US dollar weakness and investor flight from sovereign bonds and currencies.
Bullion jumped as much as 3.2%, building on a 4.6% leap in the previous session – the biggest one-day gain since the height of the Covid-19 pandemic in March 2020. Precious metals have risen dramatically this year on heightened geopolitical tensions and worries about the independence of the Federal Reserve, which have supported the debasement trade. Silver also hit an all-time high on Thursday.
Photo Credit: Bloomberg
Traders looked beyond the Fed’s widely expected decision on Wednesday to leave interest rates unchanged. With a new monetary chief expected to take over from Jerome Powell later this year, BlackRock Inc.’s Rick Rieder – an advocate for more aggressive rate cuts – has emerged as a top contender. Traders are ramping up bets on a dovish policy shift, which would benefit non-yielding precious metals.
“People are looking beyond Powell and thinking the next chair may be significantly more dovish,” said Bart Melek, global head of commodity strategy at TD Securities. “The choice of Fed chair will be a critical determinant how gold performs this year.”
A massive selloff in the Japanese bond market last week was the latest example of concerns over heavy fiscal spending, while speculation the US may intervene to support the yen has weighed on the dollar, making precious metals cheaper for most buyers. As investors have piled into gold, bullion has surged more than 25% so far this year. Silver’s gains have been even greater, at nearly 65%.
US President Donald Trump said this week he was not concerned about a drop in the dollar that dragged the world’s premier reserve currency to its weakest level in nearly four years, although Treasury Secretary Scott Bessent later said the administration supports a stronger currency and ruled out intervention to sell the dollar against the yen.
ALSO READ: US Stocks Drop To Session Lows After Fed Holds Interest Rates Steady
The White House’s actions – threats to annex Greenland and military intervention in Venezuela – have unsettled markets in recent weeks. The US leader on Wednesday warned Iran to make a nuclear deal or face military strikes, and in recent days has threatened both South Korea and Canada with additional trade tariffs.
“Gold and silver are the ultimate safe-haven assets against extreme risk as geopolitical turbulence continues,” said Hao Hong, chief investment officer at Lotus Asset Management, and an influential Chinese commentator with a large social media following. “Gold is the anchor of all valuations: as long as gold rises, other precious metals will surge as well.”
Silver rose as much as 2.3% to a record above $119.40 an ounce, its sixth straight day of gains. The white metal’s dramatic surge prompted CME Group to raise margins on Comex silver futures with effect from Wednesday’s close. In China – where prices have ballooned beyond international benchmarks – the only pure-play silver fund turned away new investors while local authorities in Shenzhen set up a task force to oversee the operations of a gold-trading platform.
Gold rose 1.1% to $5,477.36 an ounce as of 9:05 a.m. in Singapore, having earlier hit an all-time high of $5,588.71. Silver climbed 0.7% to $117.47 an ounce. Platinum and palladium edged lower. The Bloomberg Dollar Spot Index fell 0.1% on Thursday and was down 1.3% for the week.
ALSO READ: Fed Pauses Rate Cuts Despite White House Heat, Cites Resilient Job Market
Watch LIVE TV, Get Stock Market Updates,
Top Business, IPO and
Latest News on NDTV Profit.
