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Gold Continues Record Rally as US Dollar Weakens Amid Geopolitical Fears
(MENAFN) Gold prices continued their historic climb on Wednesday, surpassing the $5,200 mark ahead of a key U.S. Federal Reserve policy decision, while the dollar slid to a nearly four-year low amid rising geopolitical tensions.
Spot gold rose about 1.6% day-on-day to $5,264.20 an ounce as of 0700 GMT, after briefly hitting an all-time high of $5,271.45 earlier in the session. Over the past week, prices have increased roughly 9%, and over the past 12 months, gold has surged about 90.5%, including a 17% gain since the start of 2026, fueled by geopolitical uncertainty and interest rate cuts from major central banks.
Silver also gained, climbing 2.4% to $114.8 an ounce, marking an impressive 277.6% increase over the past year.
Traders attributed the rally to a weakening U.S. dollar and heightened geopolitical risks. On Tuesday, President Donald Trump remarked on the dollar’s decline: “I think it’s great. I mean the value of the dollar, look at the business we’re doing. No, dollar is doing great… if you look at China or Japan, I used to fight like hell with them because they always wanted to devalue their yen… and they’d always want to devalue it. And I said, ‘not fair.’”
The U.S. dollar index dropped more than 2.7% over the week and hit its lowest level since February 2022 on Tuesday.
Concerns over a slowing labor market and rising costs have also weighed on sentiment, with U.S. consumer confidence plunging to its lowest level in more than 11½ years in January.
Trump added that he will soon announce his choice to lead the Federal Reserve and expects a reduction in interest rates once the new chair takes office. The Fed is widely anticipated to hold rates steady at its ongoing January monetary policy meeting.
Spot gold rose about 1.6% day-on-day to $5,264.20 an ounce as of 0700 GMT, after briefly hitting an all-time high of $5,271.45 earlier in the session. Over the past week, prices have increased roughly 9%, and over the past 12 months, gold has surged about 90.5%, including a 17% gain since the start of 2026, fueled by geopolitical uncertainty and interest rate cuts from major central banks.
Silver also gained, climbing 2.4% to $114.8 an ounce, marking an impressive 277.6% increase over the past year.
Traders attributed the rally to a weakening U.S. dollar and heightened geopolitical risks. On Tuesday, President Donald Trump remarked on the dollar’s decline: “I think it’s great. I mean the value of the dollar, look at the business we’re doing. No, dollar is doing great… if you look at China or Japan, I used to fight like hell with them because they always wanted to devalue their yen… and they’d always want to devalue it. And I said, ‘not fair.’”
The U.S. dollar index dropped more than 2.7% over the week and hit its lowest level since February 2022 on Tuesday.
Concerns over a slowing labor market and rising costs have also weighed on sentiment, with U.S. consumer confidence plunging to its lowest level in more than 11½ years in January.
Trump added that he will soon announce his choice to lead the Federal Reserve and expects a reduction in interest rates once the new chair takes office. The Fed is widely anticipated to hold rates steady at its ongoing January monetary policy meeting.
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