This article was first published on TurkishNY Radio.
The Gold price rally extended on Thursday as bullion climbed above $5,500 and approached $5,600. The decision came after the US Federal Reserve held its interest rates unchanged.
Geopolitical tensions between the United States and Iran helped boost demand as well. Combined, these factors drove gold to record highs and further entrenched its position as a safe-haven asset for the uncertain.
Gold and Silver Hit Fresh Record Highs
Spot gold increased more than 2.4% on the day to $5,548.50 an ounce. Prices reached an intraday record of $5,595.44 earlier in the session. It is also up almost 13% for the week, indicating how strong gold’s rally has been.
Silver also advanced sharply. The metal rose over 1 percent to a new all-time high of $120.43 an ounce. Silver has returned more than 280% year-to-date, and now momentum continues to build across the precious metals space.
Gold is up around 102% over the past 12 months. With the gains, shares are up nearly 29% since the start of the year. Analysts attribute the prolonged rally in Gold to expectations of lower interest rates, geopolitical uncertainty and robust demand from central banks as well as consumers.
Federal Reserve Decision Supports Gold
The Federal Reserve held its benchmark policy rate steady within the 3.5% to 3.75% range. Officials said economic activity continues to expand at a solid pace. The decision reduced pressure from higher borrowing costs and helped maintain the Gold price rally.
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Jerome Powell, the chair of the Federal Reserve, said rate cuts could be in sight if price pressures subside. He said the effects of tariffs on goods prices could start to peak and fade.
The comments also reinforced expectations for less policy later in the year. These have been the supports of the Gold price rally.
Geopolitical Risks Increase Demand
Tensions between the United States and Iran escalated during the week. President Donald Trump said a large naval force was moving toward Iran. He warned of severe consequences if negotiations failed. Heightened geopolitical risk often increases demand for safe assets, adding fuel to the Gold price rally.
Central banks have increased gold purchases over the past year. Many emerging economies are diversifying reserves away from the US dollar. This steady official sector buying has helped stabilize prices and support the Gold price rally during periods of market stress.
Investors Seek Stability
Many investors have turned to traditional safe havens amid volatility in cryptocurrency markets. There have also been mixed signals from equity markets.
This has led both institutional and retail investors to add to their gold exposure. This has helped to bolster the belief that Gold price rally momentum remains.
Silver Confirms Broader Metals Strength
Prices have been buoyed by industrial use and investment demand. Although Silver is still the most volatile of the two metals, its price action has strongly contributed to Gold price rocketing higher.
Other analysts are debating whether prices can rise higher. Chronic inflation and continued geopolitical uncertainty are key risks. Reduced interest rates would also help non-yielding assets.
Conclusion
Gold crossing $5,500 represents a key turning point for gold. Temporary pullbacks are still possible following such strong gains. But the broader trend is still in place.
The Gold aggressive price rise is a mix of signals in policy, geopolitical risk and long-term demand that still favours precious metals.
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Appendix: Glossary of Key Terms
Spot gold: The spot market price for immediate delivery of gold.
A rally in gold price: gold prices rising for an extended period.
Silver price: The price of silver per ounce in the spot market.
Federal Reserve: The central bank of the United States, which determines monetary policy.
Policy rate: The rate of interest that a central bank sets to influence economic conditions.
Geopolitical tensions: Political or military conflicts that impact financial markets.
Central bank reserves: Assets held by the monetary authorities to maintain stability in economies.
Bullion market: International market for metals like gold, silver, etc.
Frequently Asked Questions Gold Price Rally
1- Why is gold rising now?
Gold is rising due to steady interest rates, geopolitical tensions, and strong demand from central banks and investors.
2- How high did gold prices reach?
Spot gold touched an intraday high near $5,595 an ounce.
3- Is silver also benefiting?
Yes. Silver reached a new all-time high above $120 an ounce.
4- Could prices fall soon?
Short-term corrections are possible, but long-term support remains if uncertainty continues.
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