Gold prices hit record high of $4,800 amid geopolitical tensions
What's the story
Gold prices hit a new high of over $4,800 on Wednesday, driven by safe-haven demand and a weaker US dollar. The surge comes as geopolitical tensions rise after the US and its NATO allies threatened action over President Donald Trump's Greenland takeover bid. Spot gold climbed 1.2% to $4,818.03 per ounce after hitting an all-time high of $4,836.24 earlier in the session.
Market impact
Trump's Greenland takeover bid fuels market uncertainty
US gold futures for February delivery rose 1% to $4,813.50 per ounce. This comes after Trump reiterated his intent to take control of Greenland, even suggesting the possibility of using force if necessary. The dollar hovered near three-week lows against the euro and Swiss franc as White House threats over Greenland sparked a broad selloff in US assets from currency to Wall Street stocks and Treasury bonds.
Price surge
Weaker dollar boosts gold prices for overseas buyers
The weaker dollar has made greenback-priced metals cheaper for overseas buyers, further pushing up the price of gold. In a low-interest-rate environment, gold usually performs well as it does not yield interest. Meanwhile, spot silver rose 0.1% to $94.68 an ounce after hitting a record high of $95.87 on Tuesday while platinum and palladium also saw gains amid the ongoing geopolitical tensions and market uncertainty over Trump's Greenland takeover bid.