Gold Surpasses $5,000 an Ounce Amid Geopolitical Tensions and Dollar Decline
Gold prices continued their rapid ascent on Wednesday, climbing over 2% to reach $5,044.74 an ounce in spot trading, following a previous record surge.
In the U.S. futures market, gold rose by 2.7% to $5,067 an ounce, as investors anticipate at least two interest rate cuts by the Federal Reserve in 2026.
This increase is attributed to a rise in buying activity aimed at capitalizing on opportunities, alongside a decline in the dollar against most major currencies, enhancing gold's appeal as a safe-haven asset.
In this context, gold experienced its best daily performance since 2008 after a previous jump of 5.9% on Tuesday, reaching an all-time high of $5,594.82 last Thursday.
Other precious metals also saw notable increases, with silver rising 3.2% to $87.84 an ounce after hitting a record $121.64 last week. Platinum increased by 2.3% to $2,260.50, while palladium gained 3% to $1,782.85 an ounce.
Geopolitical tensions between the U.S. and Iran further fueled demand for the precious metal, following the U.S. military's downing of an Iranian drone that approached the USS Abraham Lincoln in the Arabian Sea in a "hostile manner." Meanwhile, nuclear talks between the two nations are set to take place in Oman on Friday.
From an economic standpoint, President Donald Trump signed a spending bill that ended the partial government shutdown, as investors await employment data from ADP for insights into future Federal Reserve policy. Lower interest rates enhance the attractiveness of gold, which does not yield interest.
