Gold prices extended their rally on Wednesday, rising more than 3 percent as the US dollar slid to a near four-year low amid ongoing geopolitical uncertainty and ahead of a key monetary policy decision by the Federal Reserve.
Spot gold was up 0.6 percent at $5,219.97 per ounce by 0153 GMT, after briefly touching a fresh record high of $5,224.95 earlier in the session. The precious metal has now gained more than 20 percent since the start of the year. Meanwhile, US gold futures for February delivery surged 2.6 percent to $5,216.80 per ounce.
Analysts largely attributed the sharp gains to continued weakness in the US dollar. Kelvin Wong, senior market analyst at OANDA, said gold’s move highlights its strong inverse relationship with the greenback.
“Yesterday’s price rise in the US session was triggered by President Donald Trump’s remarks about the dollar, which suggested a broad-based preference within the White House for a weaker currency going forward,” Wong said.
The dollar has been under heavy pressure amid what analysts describe as a growing “crisis of confidence.” It remains near four-year lows after Trump said the currency’s value was “great” when asked whether it had fallen too much.
Market sentiment was further weighed down by US economic data showing consumer confidence falling to its lowest level in more than 11 and a half years in January, reflecting rising concerns about a weakening labour market and persistently high prices.
Trump also said he would soon announce his nominee for chair of the US central bank and predicted that interest rates would fall once new leadership takes over. However, the Federal Reserve is widely expected to keep interest rates unchanged at its January policy meeting, which is currently underway.
Wong noted that near-term resistance for gold could emerge around $5,240 per ounce. Separately, Deutsche Bank said this week that gold prices could climb as high as $6,000 per ounce in 2026, citing sustained investment demand as central banks and investors increase exposure to non-dollar and tangible assets.
Other precious metals also moved higher. Spot silver gained 0.6 percent to $113.63 per ounce, after hitting a record $117.69 earlier this week, and is already up nearly 60 percent this year. Platinum rose 1.5 percent to $2,679.15 per ounce after touching a record high of $2,918.80, while palladium edged up 0.9 percent to $1,951.93 per ounce.
