The US dollar has continued to weaken over the last week, as safe-haven demand has catapulted the gold price beyond the $2040 mark. Indeed, the precious metal ended the week up more than 1.4%, and nearing the $2050 level. Although it has seen some decrease during the weekend, it is still noting a positive trajectory.
The price development has taken place despite high-interest rates and suspended potential for interest rate cuts. Specifically, the Federal Reserve is likely to hold off on cutting interest rates with positive inflation data being reported over the last month. However, that has not negatively affected gold, which is still amid a balancing act according to some experts.
Also Read: US Dollar Index Rebounds as Gold & Silver Dip: A Breakdown
Gold Price Nears $2050 to Enter Feburary’s Last Week Amid Safe Haven Demand
Throughout the last few months of 2023, Gold had seen a massive increase in value. Specifically, the metal saw it reached its all-time high in price at December’s midpoint. IT was trading at $2135, with high hopes for how it would perform heading into the new year.
However, that expectation saw little actuality in 2024’s first two months. Yet, it has still maintained a strong position above the $2000 level. Moreover, it has recently seen some positive developments despite the ongoing economic situation. Indeed, the US dollar has continued to weaken, allowing the gold price to surpass the key $2040 level.
Also Read: US Dollar Index Rebounds as Gold & Silver Dip: A Breakdown
Before the end of the week, gold had risen to near the $2050 level, up more than 1% over the last five days. The overall dollar’s negative trajectory has been a positive for gold thus far, fueling safe-haven demand. Moreover, that is necessary as the interest rate cuts many expected may not take place for several months.
“Gold is up primarily on the fact that the US dollar is a little weaker,” Bob Haberkorn, the senior market strategist at RJO Futures told CNBC. “It’s a delicate walk right now in the precious metals market, but there is a lot of safe-haven buying despite the rates being as high as they are.”
Earlier this week, Fed governor Christopher Waller said that Central Bank officials are in “no rush” to implement interest rate cuts. Subsequently, many experts have predicted that the US may not cut rates until June. That would far surpass previous expectations of March cuts.