Gold surges beyond $5,200 as Dollar hits near 4-year low

Gold’s powerful rally continued on Wednesday, with prices breaking above $5,200 per ounce for the first time, driven by a sharp slide in the US dollar and lingering geopolitical concerns ahead of a Federal Reserve policy decision.

Spot gold rose 1.1 percent to $5,243.58 per ounce by 0314 GMT, after touching a record high of $5,247.21 earlier in the session. Prices are now up more than 20 percent since the beginning of the year. US gold futures for February delivery also jumped, gaining 3.1 percent to $5,237.70 per ounce.

Analysts said gold’s strength reflects its strong inverse relationship with the dollar. Kelvin Wong, senior market analyst at OANDA, said the latest surge was fueled by comments from US President Donald Trump that suggested support within the White House for a weaker dollar. He added that gold’s rise during the US trading session followed Trump’s remarks indicating comfort with the currency’s recent decline.

The dollar has been struggling near four-year lows, weighed down by what analysts described as a growing “crisis of confidence.” Selling pressure intensified after Trump said the dollar was “doing great” when asked about its value.

Adding to market unease, US consumer confidence fell in January to its lowest level in more than 11 years, reflecting concerns over a slowing labor market and persistently high prices. Trump also said he would soon announce his choice for the next head of the US central bank, predicting that interest rates would fall once the new chair takes office.

The Federal Reserve is widely expected to keep interest rates unchanged at its January meeting, which is currently underway. Wong noted that near-term resistance for gold could emerge around the $5,240 per ounce level.

Looking further ahead, Deutsche Bank said on Tuesday that gold prices could reach $6,000 per ounce by 2026, citing sustained investment demand as central banks and investors continue to increase exposure to non-dollar and tangible assets.