Gold surpassed $5,200 for the first time on Wednesday, following a rise of over 3% on Tuesday, as the dollar fell to a near four-year low amid ongoing geopolitical concerns, in anticipation of a U.S. Federal Reserve monetary policy decision. Spot gold increased by 0.6% to $5,219.97 per ounce, as of 0153, following a peak of $5,224.95 earlier, reflecting an increase of over 20% since the beginning of the year. U.S. gold futures for February delivery experienced a notable increase of 2.6%, reaching $5,216.80 per ounce. The increase in gold prices can be attributed to a robust indirect correlation with the dollar. The recent uptick in gold during the U.S. session was influenced by remarks made by Trump in response to a casual inquiry regarding the dollar, suggesting a prevailing consensus within the White House favoring a weaker currency in the future, according to Kelvin Wong.

The U.S. dollar faced a “crisis of confidence,” hovering near four-year lows and intensifying dollar selling, following President Donald Trump’s assertion that the currency’s value is “great” when questioned about its perceived decline. In January, U.S. consumer confidence experienced a significant decline, reaching its lowest point in over 11-1/2 years, driven by increasing concerns regarding a sluggish labor market and elevated prices. Trump stated that he will soon reveal his selection for the position of head of the U.S. central bank and forecasted a decrease in interest rates following the new chair’s assumption of office.

The Federal Reserve is anticipated to maintain its current interest rates during the ongoing January monetary policy meeting. Wong added that near-term resistance for gold could be seen around $5,240 per ounce. Deutsche Bank indicated on Tuesday that gold might reach $6,000 per ounce by 2026, attributing this potential rise to ongoing investment demand as central banks and investors enhance their allocations to non-dollar and tangible assets.

Spot silver increased by 0.6% to $113.63 per ounce, following a peak of $117.69 reached on Monday. The white metal has experienced an increase of nearly 60% year-to-date. Spot platinum increased by 1.5% to $2,679.15 per ounce following its peak of $2,918.80 on Monday, whereas palladium rose by 0.9% to $1,951.93.