Gold prices reach record highs as Fed hints rate cuts; geopolitical tensions rise
Gold prices surged past $4,900 per ounce, driven by a weaker U.S. dollar, expectations of Federal Reserve rate cuts, and geopolitical tensions over Greenland. Other metals, including silver, platinum, and palladium, also reached record levels. Analysts suggest $5,000 as a near-term target and advise investors to diversify portfolios and track economic, monetary, and political developments.
Gold prices rise
Gold hit a high of $4,917.65 per ounce in global markets and later touched $4,937.38. US gold futures for February delivery closed 1.6% higher at $4,913.40. The rise comes after the US dollar weakened, making gold cheaper for buyers using other currencies. Investors are also responding to signs that the Federal Reserve may cut interest rates later this year.
Weak US dollar
The US dollar index fell by 0.4%, helping gold demand from overseas buyers. Markets now expect two quarter-point rate cuts in the second half of the year. Lower interest rates reduce returns on savings and bonds, making gold more attractive. Recent US economic data showed steady consumer spending in October and November, which did not affect market expectations for rate cuts.
Geopolitical tensions
Political developments have also played a role in gold’s rise. US President Donald Trump said the US secured permanent access to Greenland through a NATO agreement. NATO officials stressed Arctic security to counter Russia and China, while Denmark said its sovereignty over Greenland remains unchanged. Such uncertainty often pushes investors to safe-haven assets like gold.
Other metals
Silver, platinum, and palladium followed gold’s gains. Silver hit a record $96.58 per ounce. Platinum rose 4.6% to $2,601.03, and palladium increased 3.3% to $1,900.59 per ounce. Analysts say silver benefits from its own demand, while platinum and palladium follow the broader metals market.
Advice for investors
Experts say short-term dips in gold could offer buying opportunities. Technical analysis shows $5,000 as a likely near-term target, with some models suggesting $5,187 in the future. Investors are advised to diversify portfolios across gold, silver, and other metals, and follow US economic data, Federal Reserve announcements, and global political developments to manage risks.