Gold surpassed the $5,500 per ounce mark for the first time on January 29, reaching an all-time high of $5,584 in the international market, before settling around $5,519, reflecting a 4.06 percent increase from the previous close. This surge was driven by the US Federal Reserve’s decision to maintain interest rates unchanged amidst ongoing geopolitical and trade tensions.
Analysts noted that while gold has gained significantly due to continuous tariff uncertainties and the shift towards safe-haven assets, the market is now entering an overheated phase, which could lead to increased volatility.
The Federal Reserve’s policy rate remains steady in the 3.50-3.75 percent range, with recent data showing the US unemployment rate at 4.4 percent and yields on the 10-year treasury at 4.25 percent and 2-year treasury at approximately 3.57 percent.
Additionally, the escalating tensions between the US, Iran, and the crises in Ukraine and Gaza have further bolstered demand for gold as a secure investment. The USA President’s threats of imposing a 100 percent tariff on Canada if it negotiates with China, alongside a potential 25 percent tariff on South Korea, have intensified the appeal for gold as investors seek refuge from the uncertainty in international trade relations.
