Gold prices surged on Monday, approaching record levels as investor demand for safe-haven assets intensified amid political uncertainty in the U.S. and renewed weakness in the dollar. The precious metal gained traction as market participants weighed the potential fallout from recent developments linked to former President Donald Trump and shifting expectations for Federal Reserve policy.
The U.S. dollar struggled to maintain stability, extending its recent decline against major currencies. Concerns over the economic outlook and speculation that the Fed may adopt a more dovish stance have pressured the greenback. A weaker dollar typically makes gold more attractive to foreign buyers, further boosting demand for the metal.
Political uncertainty surrounding Trump-related legal proceedings has added another layer of risk aversion in financial markets. Investors have been closely monitoring developments, with rising geopolitical and domestic tensions prompting a flight to gold. The metal’s appeal as a store of value remains strong, particularly in times of heightened instability.
Gold US Dollars 1-D Chart as of February 13th, 2025 (Source: TradingView)
Meanwhile, Treasury yields edged lower as traders adjusted their expectations for future interest rate moves. Lower yields reduce the opportunity cost of holding non-yielding assets like gold, reinforcing bullish sentiment in the precious metals market. If rate-cut expectations gain further momentum, gold could continue its upward trajectory.
Technical indicators suggest gold remains in a strong uptrend, with key resistance levels approaching near its all-time highs. Market participants are watching the $2,900 level closely, as a decisive break could open the door for further gains toward uncharted territory. However, any shift in Fed rhetoric or stabilization in the dollar could limit the upside.
Looking ahead, analysts expect gold to remain highly sensitive to macroeconomic factors, including inflation data and central bank signals. With traders awaiting key U.S. economic releases, volatility in the gold market is likely to persist. Until greater clarity emerges, the metal is set to retain its appeal as a hedge against uncertainty.
