By Ahmad Assiri, Research Strategist at Pepperstone
Gold has extended its impressive run climbing to fresh record highs north of $3,650 oz and delivering close to 9% gains in just two weeks
The speed and magnitude of the move have become embedded in the implied volatility of the yellow metal, while also demonstrating the favorable backdrop it offers for positioning and speculative flows
Unlike the prior sharp April rally, when tariffs provided a clear catalyst, today’s advance is supported by a convergence of forces, inflation hovering near 3% though viewed as transitory, markets positioning for US rate cuts and an accommodative monetary stance and reduced confidence in long end of the yield curve.
What gives this leg higher further resilience is the breadth of participation. Central banks continue to diversify reserves in a structural trend though this has been observed for sometime, while funds and institutions are treating gold as a strategic anchor.
Near-term profit taking cannot be ruled out after such sharp gains but the bigger picture remains intact, gold appetite is rising and it has become the truest compass for current global anxiety.