Gold Hits Record Highs Near $4,620 per Ounce Amid Easing Inflation and Rising Global Political Tensions

New York | EcoPulse24

Gold prices set new all-time highs during Tuesday’s session, approaching the $4,620 per ounce mark, as concerns about renewed inflationary pressures in the United States eased and demand for safe-haven assets increased. This performance was bolstered by inflation data that reinforced market conviction that monetary policy would not become more restrictive.

Data showed headline inflation in December steady at 2.7%, while core inflation held at 2.6%, its lowest since 2021. The calmer monthly reading of core inflation supported expectations that monetary policy would remain on its current path without additional tightening, creating a favorable environment for gold’s rise.

This inflationary calm coincided with a clear increase in demand for hedging, amid renewed concerns about the independence of the Federal Reserve and rising geopolitical risks. US prosecutors launched a criminal investigation related to Fed Chair Jerome Powell’s testimony in June, a move Powell described as part of political pressure aimed at influencing interest rate policy.

Uncertainty intensified after former President Donald Trump announced a 25% tariff on countries continuing to trade with Iran, alongside repeated warnings of possible military action amid widespread protests within the country, further amplifying fears of broader geopolitical turmoil.

Analysis
Gold’s surge to record levels reflects the convergence of two main factors: easing inflationary pressures, which reduce the risk of tighter monetary policy, and escalating political and geopolitical uncertainty, which boosts demand for safe assets. This combination supports continued risk premium pricing in the gold market, with the overall trend remaining dependent on US monetary policy developments and the trajectory of international tensions.