Gold prices surged tonight due to a combination of dovish sentiment from the Fed and market concerns about the future economic outlook. Following the interest rate cut and signals that the Fed is no longer aggressive about raising interest rates, US bond yields tended to fall, lowering the opportunity cost of holding gold.

At the same time, the US dollar is less strong than before, making the dollar-denominated precious metal feel cheaper to global buyers. The result: an influx of buying into gold, pushing prices through key psychological levels in the evening session.

In addition to interest rates and the dollar, the "safe haven" trend also appears to be rekindling. Concerns about an economic slowdown, geopolitical tensions, and uncertainty about the policy direction of other central banks have made gold a prime hedging destination. Many market players who previously only "hitched a ride" during the rally are now starting to increase their positions, seeing the opportunity for a medium-term uptrend still open.

As long as the Fed's narrative is more dovish, yields are falling, and risk-off is occurring alternately, gold has a strong case for continuing to rise, even though there may be occasional healthy corrections due to profit-taking. (cay)

Source: Newsmaker.id