Gold prices are once again causing a stir after surging to a new record above $5,500 per ounce, extending a rally that has been very strong since the beginning of the year. In the Asian session, gold briefly reached a new peak before moving lower; at 8:02 a.m. in Singapore, gold was reported to be around $5,461.98/ounce after previously hitting an intraday record. This surge occurred as the US dollar weakened and investors became more aggressive in seeking alternative stores of value.

The biggest driver isn't just inflation it's confidence. Many investors are starting to hesitate in relying on government bonds and currencies as their primary safe haven, prompting a shift in funds to gold. Reuters also noted that the gold rally was supported by safe haven demand, economic and geopolitical uncertainty, and continued strong buying momentum.

The market is also looking ahead to the Fed's recent decision to hold interest rates. The focus now shifts to the next policy direction especially as the issue of the next Fed chairman fuels speculation: if the new leadership is more dovish, the chance of interest rate cuts will increase, and that typically fuels gold's rally (as gold doesn't yield a yield).

Globally, pressure is also coming from outside the US: volatility in the bond market (including fiscal concerns) and yen dollar dynamics are adding to the "flight from currencies" narrative. At the same time, Trump's comments about the dollar and various geopolitical risks are making the market increasingly defensive and gold becomes the easiest target when volatility rises.

The effect is spilling over to other precious metals. Reuters reports that silver is also nearing a record/touching a record in this series of rallies, while platinum and palladium are also moving along with safe-haven sentiment and a weakening dollar. With the rally already "parabolic," the market typically remains wary of a short term correction but as long as the dollar is weak and global risks are high, the bias remains to the upside.

5 Conclusions

Gold is surging due to a combination of a weaker dollar and investors reducing positions in bonds/currencies.

The market isn't focused on the Fed's decision, but rather on the next policy direction.

Speculation about a new, more dovish Fed chairman is strengthening bets on lower interest rates positive for gold.

Geopolitical risks and a "crisis of confidence" in US assets are making gold even more attractive.

Silver is also supported by the precious metals rally, indicating widespread safe-haven demand. (az)[sma]

Source : Newsmaker.id