World prices for $XAU have, for the first time in history, surpassed the psychologically important mark of $4,800 per troy ounce. Such a sharp increase is associated with the escalation of geopolitical tensions in the world, particularly with statements from U.S. President Donald Trump about the intention to take control of Greenland. These events have heightened investors' anxiety and triggered an increase in demand for so-called safe assets, traditionally including gold.
On the spot market, the cost of #GOLD rose by 2.1% and reached $4,865 per ounce. During trading, the price climbed even higher — to a record $4,887.82. Futures contracts for gold in the U.S. for delivery in February also showed strong growth, adding nearly 2% and reaching $4,858.3 per ounce. This is reported by epravda.com.ua citing the Reuters agency.
According to Bob HaberKorn, senior market strategist at RJO Futures, the market is experiencing a pronounced "fear of missing out" effect. Investors fear they will miss the opportunity to enter a rising market, and combined with the unstable geopolitical situation, this creates, in his words, the "perfect storm" for further price increases not only for gold but also for silver.
Meanwhile, the U.S. stock market demonstrated a moderate recovery after the largest sell-off in the past three months. Investors evaluated Donald Trump's speech at the World Economic Forum in Davos, where he stated that Europe is moving "in the wrong direction." At the same time, the U.S. President emphasized that he is not considering the use of military force to establish control over Greenland, which partially eased market concerns.
Additional uncertainty is brought about by the situation surrounding the U.S. Federal Reserve System. The country's Supreme Court is preparing to consider an unprecedented case related to Trump's attempt to dismiss Federal Reserve Board member Lisa Cook. This process could become a serious test for the principle of central bank independence.
Most economists surveyed by Reuters believe that the Federal Reserve is likely to keep the key interest rate unchanged in the current quarter and possibly until the end of the term of Fed Chair Jerome Powell in May. Low interest rates traditionally support the rise in gold prices, as this asset does not yield interest income and becomes more attractive in the context of cheap borrowing.
In the market for other precious metals, the dynamics were mixed. The spot price of silver remained virtually unchanged at $94.61 per ounce, staying close to the record high of $95.87 reached the day before amid supply shortages and rising industrial demand. Platinum rose by 1% to $2,487.05 per ounce, having earlier in the day updated its historical record at $2,511.80. At the same time, palladium decreased in price by 0.9% to $1,849.25 per ounce, although it had previously risen to a weekly high.
