The precious metal surged amid cash flow seeking a safe haven amid tensions between the US and Venezuela. Silver prices also rose sharply to an all-time high.
Spot gold prices increased by 0.7%, to 4,476.15 USD/ounce at 6:37 (ie 1,37 - Vietnam time), after reaching a record of 4,497.55 USD/ounce in the session at one point. US gold futures for February delivery increased by 0.9%, to 4,509.8 USD/ounce.
Mr. Tim Waterer - Head of Market Analysis at KCM Trade, said that the US-Venezuela tensions are making gold continue to be in the focus of investors as a risk-off tool. He added that the sharp increase in gold prices this week is part of a broader shift in investment position, in the context of US interest rates forecast to continue to decrease.
According to Mr. Waterer, investors still consider precious metals an effective channel to diversify their portfolio and preserve asset value. I dont think gold or silver have reached their peak, he said.
According to Reuters, last week, US President Donald Trump announced the imposition of " frights" on all oil tankers that are being sanctioned from entering and leaving Venezuela.
Gold prices are also supported by the news that Mr. Trump may appoint a new Chairman of the US Federal Reserve (Fed) in early January. The market is now betting on two interest rate cuts next year, in the context of expectations that monetary policy will be more dovish.
Gold prices increased thanks to a combination of factors such as geopolitical risks, expectations of interest rate cuts, central bank purchases, the trend of de-dollarization and capital flow back to ETFs.
Mr. Frank Walbaum - market analyst at Naga Trading and Investment Platform - said that as the end of the year approaches, thinner market liquidity can cause strong price fluctuations. According to him, gold will be particularly sensitive to geopolitical news as well as changes in interest rate expectations.
Meanwhile, spot silver prices rose 0.6%, to 69.44 USD/ounce, after hitting a record 69.98 USD/ounce. Since the beginning of the year, silver prices have increased by more than 141%, far exceeding the increase of gold, thanks to a shortage of supply, high industrial demand and strong investment capital flows.
Mr. Michael Brown - senior strategist at Pepperstone - said that the market may have an adjustment period during the holiday due to reduced liquidity. However, he believes that the increase will soon return when trading volume recovers, with the $5,000/ounce mark being a natural target for gold next year, while silver could head towards $75/ounce in the long term.
Along with the upward trend of gold and silver, spot platinum prices increased by 2.2%, to 2,167.25 USD/ounce - the highest level in more than 17 years, while palladium prices increased by 2.5%, to 1,803.91 USD/ounce, the highest in the past 3 years.
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