ISLAMABAD: Gold prices surged past the $5,200 mark for the first time on Wednesday. Gold further extended strong gains as a weakening US dollar and ongoing geopolitical tensions drove investors toward safe-haven assets ahead of a key Federal Reserve policy decision.
Moreover, market sentiment remained highly sensitive to signals from Washington and global central banks, which further supported bullion demand.
Dollar weakness fuels rally in precious metals
Spot gold climbed 1.1% to $5,243.58 per ounce by early Asian trading, after touching a fresh record high of $5,247.21. The metal has now risen more than 20% since the start of the year. Meanwhile, US gold futures for February delivery surged 3.1% to $5,237.70 per ounce, confirming the strength of bullish momentum across global markets.
Analysts linked the rally directly to the dollar’s decline. Kelvin Wong, senior market analyst at OANDA, said gold continued to benefit from its strong inverse correlation with the greenback. He explained that recent remarks by President Donald Trump suggested broad acceptance within the White House for a weaker dollar, which accelerated selling pressure on the currency. Consequently, investors shifted more capital into gold.
Market focus turns to Fed decision and outlook
The US dollar hovered near a four-year low as traders cited a growing crisis of confidence. In addition, US consumer confidence fell to its weakest level in more than 11 years during January, reflecting concerns about a sluggish labour market and persistent high prices.
Trump also announced he would soon name a new Federal Reserve chair and predicted interest rates would decline under new leadership. Nevertheless, markets widely expect the Fed to hold rates steady at its ongoing January meeting.
Wong added that near-term resistance for gold stands around $5,240 per ounce. Looking ahead, Deutsche Bank projected on Tuesday that gold could climb to $6,000 per ounce in 2026 due to sustained investment demand and diversification away from dollar assets.
Other precious metals also posted gains. Spot silver rose 1.9% to $115.11 per ounce and has already surged nearly 60% this year. Platinum increased 2% to $2,692.60, while palladium advanced 1.4% to $1,961.68.
