Stability of Gold Prices Near Their Record Levels

SadaNews - The price of gold has stabilized near its record levels, as traders prepare for the possibility of a reduction by the US Federal Reserve this week and await any signals for further monetary easing throughout the year.

The yellow metal traded at around $3,640 an ounce, after four consecutive weeks of gains. Traders are anticipating a reduction of a quarter percentage point this week, amid signs of weakness in the US labor market, with prospects for additional cuts extending into 2026.

This expectation has pushed Treasury yields to their lowest levels in months and weakened the US dollar, which has boosted demand for gold. Lower yields reduce the opportunity cost of holding gold, while a weaker dollar makes the metal more attractive to buyers.

The pivotal question for investors this week remains: Will the Fed confront these expectations or leave the door open for further easing?

Daniel Hynes and Soni Kumari from ANZ Group Holdings wrote in a research note: "Macroeconomic data will take precedence over tariff news," indicating that investors are monitoring the impact of Trump's tariffs on US growth and inflation.

Gold has risen nearly 40% since the beginning of the year, recently surpassing its inflation-adjusted record level, after emerging from a prolonged period of sideways trading. This surge was driven by geopolitical uncertainty, President Donald Trump's tariff agenda, and intensive buying from central banks.

The unprecedented pressures Trump applies on the Fed – including his attempt to oust Governor Lisa Cook – represents a new factor supporting the metal, according to Goldman Sachs Group, which has forecasted gold prices to rise to about $5,000 an ounce.

As of 8:35 AM Singapore time, the price of gold declined by 0.2% to $3,635.66 an ounce. Meanwhile, the Bloomberg Dollar Spot Index remained stable, silver and palladium prices decreased, while platinum rose above $1,400, approaching its highest levels in a decade.

In the backdrop, the trade talks between the US and China entered their second day in Madrid, focusing on trade and security issues. Any rapprochement in trade relations between the two largest economies is expected to exert downward pressure on gold.

In Asia, an unusual surge of 19% in Thailand's gold exports to Cambodia has raised questions, as the Thai Industries Federation suspects money laundering activities behind these flows.