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FxGlobalHub: Daily News: Gold hits $3,500 as capital flows flee U.S. Assets amid policy uncertainty
Gold soars as investors lose confidence in U.S
. assets The latest rally began during the Asian session on Monday and lasted through the North American session, With spot gold prices currently trading at a record high of $3,480/oz, marking a 2% increase per day. Major technical resistance levels do not hinder the upward momentum.
Gold prices are now approaching all-time highs after adjusting for inflation, which was set earlier in January 1981.
A clear signal of new momentum is the increase in institutional investment: SPDR Gold Shares (GLD), the world's largest gold ETF, saw assets under management exceed $100 billion for the first time in history last week.
Analysts at State Street Global Advisors (GLD's marketing firm) said: "As geopolitical volatility and global uncertainty promote risk-off sentiment, investors are increasingly turning to gold as a strategic safe haven."
Gold rises as dollar weakens and trade tensions escalate
This is gold's third weekly gain of over 3% this month, second only to a move that exploded in November 2008 during the global financial crisis. Analysts note a parallel environment today as gold benefits from a weaker dollar.
The US Dollar Index (DXY) recently fell to 98.40, the lowest level in more than three years, amid continued selling pressure.
Meanwhile, the 10-year US Treasury yield remained above 4.4%, suggesting that inflation concerns remain, but confidence in the Fed's ability to respond appears to have waned.
China-U.S. Trade: More Than Tariffs
"Why would a global investor want to hold assets in a country where central bank independence is at stake?" they noted.
"The forex market reacts quickly to policy mistakes and although Trump has long supported a weaker dollar, But this is not the reason that investors want."
Expert forecast: Gold may still be undervalued
In a recent interview with Kitco News, Eric Strand, founder of AuAg Funds, said: "In the current context, gold prices still look cheap below $4,000 per ounce."
According to Commerzbank's director of commodity and foreign exchange research, gold prices will remain supported when economic uncertainty affects global growth, potentially forcing the Fed to cut interest rates in the near future.
While Jerome Powell recently downplayed the likelihood of an imminent rate cut, he acknowledged that tariffs pose a higher risk of inflation. However, the market still expects the Fed to ease policy as early as this summer, especially if no trade deal comes to fruition soon.
Gold soars as investors lose confidence in U.S
. assets The latest rally began during the Asian session on Monday and lasted through the North American session, With spot gold prices currently trading at a record high of $3,480/oz, marking a 2% increase per day. Major technical resistance levels do not hinder the upward momentum.
Gold prices are now approaching all-time highs after adjusting for inflation, which was set earlier in January 1981.
A clear signal of new momentum is the increase in institutional investment: SPDR Gold Shares (GLD), the world's largest gold ETF, saw assets under management exceed $100 billion for the first time in history last week.
Analysts at State Street Global Advisors (GLD's marketing firm) said: "As geopolitical volatility and global uncertainty promote risk-off sentiment, investors are increasingly turning to gold as a strategic safe haven."
Gold rises as dollar weakens and trade tensions escalate
This is gold's third weekly gain of over 3% this month, second only to a move that exploded in November 2008 during the global financial crisis. Analysts note a parallel environment today as gold benefits from a weaker dollar.
The US Dollar Index (DXY) recently fell to 98.40, the lowest level in more than three years, amid continued selling pressure.
Meanwhile, the 10-year US Treasury yield remained above 4.4%, suggesting that inflation concerns remain, but confidence in the Fed's ability to respond appears to have waned.
China-U.S. Trade: More Than Tariffs
- 🔹 China has escalated trade tensions with the United States, warning other countries not to align with the United States in accordance with Beijing's demands to isolate it.
- 🔹 Beijing has cut oil imports from the United States by 90 percent, instead importing record volumes of crude oil from Canada and significantly increasing soybean purchases from Brazil.
- 🔹 While Trump claims to be making progress with Japan, no formal trade deal has yet been confirmed and negotiations appear to be stalling.
- Powell is under threat: The dollar is at risk
"Why would a global investor want to hold assets in a country where central bank independence is at stake?" they noted.
"The forex market reacts quickly to policy mistakes and although Trump has long supported a weaker dollar, But this is not the reason that investors want."
Expert forecast: Gold may still be undervalued
In a recent interview with Kitco News, Eric Strand, founder of AuAg Funds, said: "In the current context, gold prices still look cheap below $4,000 per ounce."
According to Commerzbank's director of commodity and foreign exchange research, gold prices will remain supported when economic uncertainty affects global growth, potentially forcing the Fed to cut interest rates in the near future.
While Jerome Powell recently downplayed the likelihood of an imminent rate cut, he acknowledged that tariffs pose a higher risk of inflation. However, the market still expects the Fed to ease policy as early as this summer, especially if no trade deal comes to fruition soon.
