Gold prices climbed to a new all-time high above $4,950 per ounce on Friday, putting the precious metal on track for its strongest weekly performance since March 2020, supported by a weaker US dollar, persistent geopolitical uncertainty, and expectations of monetary easing later this year.
In the domestic market, gold futures on the Multi Commodity Exchange (MCX) were trading around Rs 1,57,847 per 10 grams, up nearly 1%, tracking strength in international prices.
The rally was driven largely by geopolitical developments involving the US and Europe. US President Donald Trump said he had secured permanent US access to Greenland through a deal with NATO, although details of the agreement remain unclear. Denmark, meanwhile, reiterated its sovereignty over the territory, adding to uncertainty around the situation.
Sentiment was also influenced by developments on the trade front. President Trump announced the cancellation of planned tariffs on European imports, while the European Union said it would suspend its proposed countermeasures, though it is seeking further clarity on Washington’s intentions. The easing of immediate trade tensions weighed on the dollar, indirectly supporting gold prices.
On the macroeconomic front, the latest US personal consumption expenditures (PCE) data showed that both headline and core inflation rose in line with expectations. The data suggested that disinflation remains intact, even as economic activity continues to show resilience. Markets are currently pricing in two interest-rate cuts by the US Federal Reserve later this year, which has helped underpin demand for non-yielding assets such as gold.
Investors are also closely watching developments around the US central bank leadership. President Trump is expected to announce his choice for the next Federal Reserve Chair after completing interviews with candidates. Market participants believe that a more dovish appointment could further strengthen expectations of easier monetary policy ahead.
The combination of geopolitical uncertainty, a softer dollar, and growing conviction around future rate cuts has continued to fuel strong demand for gold, pushing prices to record levels during Friday’s session.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market and commodity market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.