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Spot gold refers to the current price at which gold can be bought or sold for immediate delivery. This price is determined by the live market conditions and reflects the current supply and demand for gold.
Gold is often used as a hedge against inflation because its value tends to rise when the cost of living increases. Investors buy gold during inflationary periods to protect their purchasing power, which can lead to higher gold prices.
Gold prices are influenced by a variety of factors including market demand and supply, geopolitical events, inflation rates, and changes in currency values. For instance, during periods of high inflation or economic uncertainty, gold prices often rise as investors seek a safe-haven asset. Conversely, when the economy is stable, gold prices might decline as investors move towards riskier assets like stocks.
Gold prices tend to climb when economic uncertainty, inflation concerns, and geopolitical tensions push investors toward safe assets. Historically, gold moved from about $700 per ounce in 2008 to over $1,900 by 2011 as the financial crisis unfolded. It also rose sharply during the COVID-19 pandemic, topping $2,000 per ounce in 2020 as markets seized up.
The most recent surge has been especially strong. After hovering around $2,600–$2,700 in late 2024, gold broke higher in 2025, moving through $3,000 early in the year and reaching above $4,400 per ounce by year-end. Spot prices have even approached the $4,500+ area in early 2026, reflecting continued demand for safe-haven assets.
Drivers in 2024–2025 have included persistent inflation pressures and expectations of interest rate cuts by major central banks, which reduce the opportunity cost of holding non-yielding gold. Central bank buying also stayed firm, with many nations expanding reserves as a hedge against currency volatility.
Geopolitics remain a factor as well. Ongoing tensions around the Russia-Ukraine war and conflicts in the Middle East have kept risk premiums elevated, pushing investors toward gold as a store of value. Combined with macroeconomic uncertainty about growth and debt, this mix helped sustain gold’s rally into 2025.
Volatility of gold is driven by factors such as changes in monetary policy, geopolitical events, and fluctuations in the value of the US dollar. For example, when the Federal Reserve changes interest rates, it can lead to aggressive price movements in gold.
Additionally, geopolitical tensions, like conflicts in major economies, can cause investors to flock to gold, increasing its volatility. Since gold is typically priced in US dollars, fluctuations in the dollar's value can impact prices.
A stronger dollar makes gold more expensive for foreign investors, potentially reducing demand and lowering prices, while a weaker dollar can have the opposite effect.
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Gold can be invested in various forms, including physical gold (bullion and coins), gold ETFs, gold mining stocks, and gold futures. Each form has its own risk and return possibility.
Markets traded with a mixed tone as currencies and metals reacted to central bank signals and fresh data. The euro held firm near $1.185, supported by the ECB’s comfort with currency strength and confidence that inflation is on track, alongside expectations of a less dovish policy mix later this year.
Global markets opened cautiously in thin trading, with the euro holding near $1.185 after the ECB signaled comfort with its strength, sterling steady around $1.36 ahead of key UK data, and the yen firming toward 153 on BoJ rate-hike speculation.
Global markets started the week cautiously as major currencies and metals consolidated after recent volatility. The dollar index held just below 97 in thin holiday trade after softer US inflation (2.4% y/y, 0.2% m/m) raised rate-cut expectations, even as strong payrolls and lower unemployment signaled a stabilizing labor market.
The euro held near 1.1870 as markets turned cautious ahead of key US inflation data, which is expected to shape near-term Federal Reserve policy expectations.
The US House passed a bill to overturn President Trump’s Canada tariffs, highlighting growing Republican unease with his trade policy ahead of midterms. Despite Trump’s veto threat, the vote exposed party divisions, with some lawmakers warning of higher prices and job risks, reflecting rising political and cost-of-living concerns.
The dollar index slipped below 97 as markets awaited delayed January jobs data, with weak retail sales and reports of China urging banks to cut US Treasury exposure adding pressure on the currency.
The dollar index stayed under pressure on Tuesday as fears of softer foreign demand for US assets, reports of Chinese banks cutting Treasury holdings, expectations of delayed US jobs and inflation data, and a firmer yen on intervention talk weighed on the greenback.
The dollar index slipped to around 97.5 as delayed U.S. data due to the shutdown kept markets cautious, with investors expecting steady Fed policy until summer while risk appetite and Japan’s election added pressure against the yen.
Global markets turned cautious on Friday as risk sentiment weakened, led by a sharp drop in U.S. tech futures after Amazon’s heavy AI spending plans rattled investors.
Markets tilted in favor of the US dollar after strong services data reinforced concerns over persistent inflation.
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