NEW YORK: Gold surpassed USD4,800 an ounce for the first time on Wednesday as geopolitical tensions including US President Donald Trump’s bid to control Greenland drove safe-haven demand.
Spot gold was up 2.1percent at USD4,865 per ounce by 9:30 a.m. ET (1430 GMT), after rising as far as USD4,887.82 earlier in the session. US gold futures for February delivery climbed nearly 2percent to USD4,858.3 per ounce. “There’s a bit of fear of missing out on this trade and I think given the geopolitical situation in the world, it’s a perfect storm for higher gold and higher silver prices right now,” said RJO Futures senior market strategist Bob Haberkorn.
US stocks staged a modest recovery after the sharpest equities sell-off in three months, as investors digested Trump’s speech in Davos, Switzerland, in which he said Europe is headed in the wrong direction but ruled out using force to acquire Greenland.
Meanwhile, the US Supreme Court is set to consider Trump’s unprecedented attempt to fire Federal Reserve Governor Lisa Cook, in a case that tests the central bank’s independence. The Fed is likely to hold its key interest rate through this quarter and possibly until Chair Jerome Powell’s tenure ends in May, according to a majority of economists polled by Reuters.
Lower interest rates are favourable for non-yielding gold. Spot silver was steady at USD94.61 an ounce, after hitting a record high of USD95.87 on Tuesday, driven by supply tightness and increasing industrial demand. “Silver’s rise to a three-digit number is looking quite possible given the price momentum we are seeing, but it will not be a one-way move. There could be some correction in prices and volatility can be higher,” said Soni Kumari, ANZ commodity strategist.
Spot platinum was 1percent higher at USD2,487.05 per ounce after hitting a record USD2,511.80 earlier in the day. Palladium was down 0.9percent at USD1,849.25, after touching its highest in a week.
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