Gold hits near-record levels as ETF holdings surge, dollar eases

24 Feb 2025 13:06

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Economics
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Gold hits near-record levels as ETF holdings surge, dollar eases

Photo: Reuters

Gold (GC=F) traded close to last week’s record high as the US dollar weakened, while investors closely monitored a surge in bullion-backed exchange-traded funds (ETFs) that could propel prices toward $3,000 an ounce.

Bullion held hear $2,940 an ounce, after notching an eighth weekly gain — the longest run since 2020, News.Az reports, citing Bloomberg.

Gains have been supported by a sharp increase in demand via ETFs, with holdings last week jumping by the most since 2022.

The precious metal has hit successive peaks this year, after climbing 27% in 2024, with mounting concerns over US President Donald Trump’s disruptive trade and geopolitical agendas driving demand. Goldman Sachs Group Inc. last week raised its year-end target for the metal to $3,100, saying that central-bank buying would be a key driver, as well as expanding ETFs.

The US dollar (DX-Y.NYB) dropped on Monday after reports on Friday showed US business activity slowed and consumer confidence waned, while expectations for inflation surged. Swaps markets priced in more rate cuts by the Federal Reserve this year, with traders expecting a first reduction for 2025 in July, rather than September. Lower borrowing costs benefit gold.

Data this week includes the Federal Reserve’s preferred inflation metric on Friday, which is expected to cool to the slowest pace since June. However, glacial progress on taming price pressures overall will keep policymakers cautious about lowering interest rates further.

Spot gold was steady at $2,940.27 an ounce at 3:27 p.m. in Singapore. The Bloomberg Dollar Spot Index was down 0.2%, after three weeks of losses. Silver (SI=F) and platinum (PL=F) climbed, while palladium (PA=F) edged lower.

News.Az