Record Rise in Gold Ounce: Best Performance in 17 Years

Latest Developments and Gold Prices

The increase in global geopolitical risks, the U.S. administration's insistence on Greenland, and tensions with Europe have affected expectations of easing at the U.S. Federal Reserve (Fed), leading to a depreciation of the dollar. This situation has contributed to rising prices by increasing demand for precious metals. Additionally, concerns about the potential shutdown of the U.S. federal government and growing demand from China have played a significant role in price movements.

Rise in Gold Prices

Beginning the year at $4,313 per ounce, gold prices surged to as high as $5,598 following these developments. However, the profit-taking on the last trading day of the month and U.S. President Donald Trump's nomination of Kevin Warsh for Fed Chair led to a 10.13% decline in the price of gold per ounce. Nevertheless, gold saw a 12.42% increase in January, marking the best monthly performance in the last 16 years.

Factors Behind the Rise

The rise in gold prices has been triggered by investors moving away from government bonds and currencies. Concerns over global trade, significant fiscal expenditures, and speculation about support for the U.S. currency have put pressure on the dollar, making precious metals more attractive. Geopolitical risks have increased demand for gold, while concerns regarding the Fed's independence have further boosted prices.

Expert Assessments

Saxo Capital Commodity Strategy Chief Ole Hansen stated, "Investors are distancing themselves from government bonds and currencies in a 'debasement trade' trend to protect against the risk of currency depreciation." Hansen noted that concerns about the shutdown of the federal government in the U.S. have been putting pressure on the dollar.

Capital Economics Climate and Commodity Economist Hamad Hussain remarked, "There are many factors driving gold prices to record levels, and this trend is expected to continue in the coming days."

Conclusion and Expectations

Reaching one of its best monthly performances in recent years, gold continues to remain a safe haven for investors. Factors such as geopolitical uncertainties, the Fed's future policies, and the depreciation of the dollar are likely to continue supporting the rise in gold prices.