Safe haven demand continues to push prices of precious metals like gold and silver to new record levels in the session on January 23.
At the end of the trading session on January 23, the spot price of gold rose by $46 to $4,983 per ounce. During the session, prices at one point hit a record $4,988.
"The role of gold as a safe haven and a diversification tool during times of economic-political volatility makes this precious metal essential for investment portfolios. This is not just a temporary trend, but a sign that the situation is fundamentally changing," Tai Wong - an independent precious metals investor in the U.S. said on CNBC.
Global gold prices are nearing the $5,000 per ounce mark. Chart: Kitco
Since the beginning of the year, tensions between the U.S. and Europe over the Greenland issue, concerns about the independence of the U.S. Federal Reserve (Fed), and instability over import taxes have caused a surge in the demand for gold as a safe haven. The buying power of central banks and the demand to reduce dependence on the U.S. dollar have also supported gold's increase.
Next week, the Fed is expected to keep interest rates unchanged during its policy meeting. However, the market still expects the agency to cut rates twice in the second half of this year. Gold prices usually benefit in a low-interest-rate environment.
Meanwhile, the spot price of silver also surpassed the $100 mark for the first time in the session on January 23. At the end of the session, the price reached $103 per ounce.
"Silver prices will continue to benefit from similar factors supporting gold demand. Concerns over import taxes and low supply in the London market will further drive prices up," Philip Newman - Director of Metals Focus commented. Last year, this metal increased by more than 200%.
In addition to gold and silver, platinum also set a new record in the session on January 23, reaching $2,749 per ounce. Palladium rose 4.3% to $2,002.
HSBC noted that platinum is attracting investors, as it is a cheaper alternative to gold. Platinum supply is expected to be short by 1.2 million ounces this year.
