Gold hits record high as Dollar weakness and geopolitical risks persist

Gold prices rose in early Monday trading, extending the previous week’s rally and touching a new record high above $5,100. The precious metal is being supported by strong safe-haven demand and a weaker US dollar, which fell to a four-month low against a basket of major currencies. Geopolitical turbulence and economic uncertainty continue to weigh on investors’ minds, with no progress in peace talks between Russia and Ukraine, growing speculation about a large-scale US attack on Iran, and renewed tariff threats from the US administration, this time targeting Canada, following Ottawa’s trade talks with Beijing. At the same time, the so-called “sell America” trade has gained traction, as global investors grow increasingly uneasy about erratic US governance and policymaking, a dynamic that is putting additional pressure on the dollar. Against this backdrop, expectations that the Federal Reserve will cut rates at least twice this year are also contributing to the greenback’s weakness, shifting traders’ focus to the central bank’s meeting and rate decision later in the week. While interest rates are widely expected to be kept on hold, the policy statement and Jerome Powell’s press conference will be closely scrutinised by investors seeking further insight into the future path for interest rates.