Gold extended its record-breaking rally during Wednesday’s Asian session, with the precious metal pushing above the US$5,200 mark for the first time in history as investors positioned ahead of the United States Federal Reserve’s latest policy decision and heightened political uncertainty.
By 3:45 pm AEDT (4:45 am GMT) spot gold was up $58.89, or 1.2%, at $5,239.90 per ounce.
Gold has now gained roughly 20% over the month and more than 5% so far this week. While the move leaves gold deep in overbought territory on daily charts, momentum has remained firmly with buyers.
The advance comes as markets brace for the Fed’s policy announcement later in the U.S. session. While policymakers are widely expected to leave interest rates unchanged, traders are focused on Chair Jerome Powell’s assessment of labour market conditions and signals on the path of rates.
Any shift in tone could drive sharp moves in the U.S. dollar and, by extension, non-yielding assets such as gold.
Political developments are also in focus. Markets are alert to a potential announcement from U.S. President Donald Trump regarding the next Fed Chair, a move some analysts believe could coincide with the policy decision.
Such timing may heighten concerns over central bank independence, adding another layer of uncertainty that could support demand for gold.
Amid Trump’s volatile trade policies and ongoing commentary on the currency, the U.S. dollar has experienced significant swings. A short-covering rebound was seen after the greenback slid to four-year lows against major peers late Tuesday.
The currency had come under pressure after Trump described the dollar as “great” when asked whether it had fallen too far, a remark that traders interpreted as signalling tolerance for further weakness.
Soft U.S. data has compounded pressure on the dollar. The Conference Board’s Consumer Confidence Index dropped to 84.5 in January, the lowest reading in more than eleven years.
