Gold prices have surged to a new record high, driven by a pullback in the US dollar and expectations of further monetary easing. Spot gold was last up 1.8 per cent to $US4921.11 an ounce, marking the first session it has crossed the $US4900 threshold. ANZ analysts noted that a weaker greenback was a primary driver, with surprisingly strong US economic data paradoxically adding pressure to the dollar.
Revised data indicated that the US economy expanded slightly more in the third quarter than initially reported. A smaller-than-expected rise in jobless claims and a solid lift in personal spending further contributed to the sell-off of the US currency. This softer dollar, in turn, boosted demand for gold, effectively offsetting the impact of reduced safe-haven buying as geopolitical risks receded.
According to ANZ, geopolitical tensions eased following a framework agreement between the US and NATO regarding Greenland. The agreement includes a bolstered NATO presence, the stationing of US missiles, and mining rights aimed at limiting Chinese involvement. Crucially, the agreement did not address sovereignty, helping to alleviate concerns that the dispute could escalate into a broader trade conflict, thereby reducing the need for safe-haven assets like gold.
