As of 11:59 am (GMT), spot gold price increased by 1.7% to 4,584.12 USD/ounce, after hitting a record level of 4,600.33 USD/ounce at one point. US gold futures for February delivery also increased by 2.1% to 4,595 USD/ounce.
According to experts, instability surrounding interest rate prospects and the USD is driving strong cash flow into safe-haven assets such as gold. Notably, information about the investigation into US Federal Reserve (Fed) Chairman Jerome Powell is causing investors to flock to safe-haven assets.
Mr. Zain Vawda - analyst at MarketPulse of OANDA - said that when policy risks increase, investors tend to turn to tangible assets to preserve value.
On the currency market, the USD weakened while US stock indices fluctuated sharply, reflecting the cautious sentiment of investors in the face of possible changes in economic management policies.
Many large financial institutions such as Goldman Sachs and Morgan Stanley are currently forecasting that the US Federal Reserve (Fed) will implement two interest rate cuts this year, each of 0.25 percentage points, around mid- and late-year. The low interest rate environment often creates favorable conditions for non-profit assets such as gold.
Along with gold, the precious metal market also recorded a strong increase. Spot silver prices increased by 4.8% to 83.78 USD/ounce, after setting a new record high of 84.6 USD/ounce in the session.
According to Mr. Zain Vawda, the shrinking gold/silver price ratio shows that silver has better room to increase in price in the coming time, especially in the context of continued high industrial demand.
Spot platinum prices rose 3.5% to 2,352.90 USD/ounce, while palladium also rose 2.5%, to 1,860.43 USD/ounce. Previously, platinum had reached a historic high of 2,478.5 USD/ounce at the end of December.
Experts believe that in the context of the global market still having many fluctuations, cash flow is likely to continue to prioritize safe assets such as gold and precious metals in the coming time.
The world gold market operates through two main valuation mechanisms. The first is the spot market, where prices are quoted for transactions and immediate delivery.
Second is the futures contract market, where prices are set for futures delivery. Due to year-end book closing activities, December gold contracts are currently the most actively traded on CME.
See more news related to gold prices HERE...
