Gold prices soared above $5,200 per ounce for the first time on Wednesday, following a more than 3% jump on Tuesday, as the US dollar tumbled to levels not seen in nearly four years.
Spot gold rose 1.1% to $5,243.58 per ounce as of 0314 GMT, after briefly hitting a record high of $5,247.21, marking an increase of over 20% since the start of the year. US gold futures for February delivery climbed 3.1% to $5,237.70 per ounce.
“Gold’s rally is closely tied to its inverse relationship with the dollar. Yesterday’s US session spike came after Trump’s remarks about the dollar, which suggested a broad consensus in the White House favoring a weaker greenback moving forward,” said Kelvin Wong, senior market analyst at OANDA.
The dollar has been struggling with a “crisis of confidence,” approaching four-year lows and triggering heavy selling, after President Donald Trump commented that the dollar’s value is “great” when asked if it had fallen too much.
US consumer confidence also fell to its lowest point in over 11-and-a-half years in January, as worries over a slow labor market and high inflation weighed on sentiment.
Trump further announced that he will soon name a nominee to lead the US central bank, predicting that interest rates could drop once the new chair takes office. Meanwhile, the Federal Reserve is widely expected to keep rates unchanged at its ongoing January policy meeting.
Wong noted that gold could face short-term resistance around $5,240 per ounce. Deutsche Bank projected that gold could reach $6,000 per ounce in 2026, driven by sustained investment demand and central banks increasing allocations to non-dollar and tangible assets.
Silver also gained momentum, with spot prices up 1.9% at $115.11 per ounce, after hitting a record $117.69 on Monday. The white metal has surged nearly 60% so far this year.