On the Wings of a Dove – Gold Hits New Record Highs

Gold surged to fresh all-time highs today as dovish comments from Federal Reserve Bank Chairman Jerome Powell on Friday led to more pressure on the US dollar. Gold jumped strongly just after the market open today, as about of dollar selling hit the market and stop loss orders were hit taking the precious metal to a new high. Gold has now climbed nearly 17% over the last 40-days since it a base just prior to hostilities in the Middle East in early October. At that time, bets that the Federal Reserve would hike rates again in this cycle were peaking, and investors were buying dollars to take advantage of the yield gained by holding dollars, especially against non-yielding commodities such as Gold. However, we have seen a sharp turnaround in expectation over the last several weeks and Jerome Powell tipped many traders over the edge on Friday by declaring that he sees a more balanced risk ahead for the rate outlook. Traders are braced for more volatility in the Gold market in the week ahead as they face a plethora of fresh US data releases as well as other potentially market moving risk events.