Gold Hits New Record, Markets Flee for Safe Assets
Gold prices hit another record high on Wednesday morning, as market participants sought safe-haven assets amid escalating geopolitical tensions—particularly the massive protests in Iran that have sparked fears of a wider conflict. The threat of tougher US action has added to the uncertainty, making gold increasingly sought after as a hedge.
February gold futures rose around $38 to $4,664 per ounce, surpassing the previous record close of $4,614. Meanwhile, spot gold also briefly hit a new record at around $4,641.59 per ounce, confirming the continued strength of bullish momentum. Silver also strengthened, hitting a record high of around $91.76 per ounce, indicating continued strong inflows into the precious metal amidst global market jitters.
From a fundamental perspective, gold's push comes not only from geopolitics. The market is also still focusing on the issue of the independence of the US central bank, which makes confidence in the direction of monetary policy more sensitive. Meanwhile, US inflation data is giving mixed signals: November's PPI rose 0.2% (m/m) and 3.0% (y/y), while the latest consumer inflation figures showed a CPI of 2.7% (y/y) and a core CPI of 2.6% (y/y)—benign enough to keep hopes of a rate cut alive, but not yet allaying inflation concerns.
As for the Fed's policy, the market is currently leaning towards keeping rates on hold at its late-January meeting, awaiting further clues from data and comments from central bank officials. In financial markets, the dollar is holding steady around the 99s on the dollar index, while US bond yields are moving slightly lower—a combination that generally makes gold more comfortable holding at higher levels.
Source: Newsmaker.id
