Gold prices have surged to a fresh record high, buoyed by a weakening US dollar and expectations of further monetary easing. Spot gold was last up 1.8 per cent to $US4921.11 an ounce, crossing the $US4900 mark for the first time. ANZ analysts cited expectations of further monetary easing and a weaker greenback as the primary drivers of the price surge.
Paradoxically, better-than-expected US economic data added pressure to the US dollar. Revised data indicated that the American 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 triggered a sell-off in the US currency, further fuelling demand for gold.
The softening US dollar helped lift demand for gold, offsetting reduced haven buying as geopolitical risks receded. ANZ noted that tensions eased after the US reached a framework agreement with Europe over Greenland, which includes a bolstered NATO presence, the stationing of US missiles, and mining rights aimed at limiting Chinese involvement.
The agreement did not include any discussion of sovereignty, helping to calm fears that the dispute could escalate into a broader trade conflict. This easing of geopolitical tensions, combined with the weaker US dollar, created a favourable environment for gold, driving it to new record highs.
