Gold Surpasses $5,000 an Ounce Amid Geopolitical Tensions and Dollar Decline
Gold continued its remarkable ascent on Wednesday, gaining over 2% to reach $5,044.74 per ounce in spot trading, following its previous record surge.
U.S. gold futures rose by 2.7% to $5,067 per ounce, fueled by investor expectations of at least two interest rate cuts by the Federal Reserve in 2026.
This increase is attributed to heightened buying activity as investors seek opportunities, alongside a decline in the dollar against most major currencies, enhancing gold's appeal as a safe haven asset.
Gold recorded its best daily performance since 2008 after a 5.9% jump on Tuesday, reaching a historic high of $5,594.82 last Thursday.
Other precious metals also experienced notable gains, with silver rising by 3.2% to $87.84 per ounce, following a record high of $121.64 last week. Platinum increased by 2.3% to $2,260.50, while palladium climbed 3% to $1,782.85 per ounce.
Geopolitical tensions between the United States and Iran are further propelling the precious metal's value, particularly after the U.S. military shot down an Iranian drone that approached the USS Abraham Lincoln in the Arabian Sea.
Simultaneously, nuclear negotiations between the two nations are scheduled to take place in Oman on Friday.
On the economic front, President Donald Trump signed a spending agreement that ended the partial government shutdown, while investors await employment data from ADP for insights into future Federal Reserve policy.
The anticipated interest rate cuts enhance gold's attractiveness, as it does not yield any returns.
