(Bloomberg) — Gold prices rose, near record levels, as investors looked ahead to U.S. inflation data and focused on escalating tensions in Venezuela. Silver climbed to new highs and platinum jumped to its highest level since 2008.
Gold was trading around $4,350 an ounce, recovering from a slight decline in the previous session that ended a five-game winning streak. Thursday’s inflation data will be closely watched for clues on how the Fed’s willingness to cut interest rates further may be affected. Ahead of the news, several key Fed officials will speak publicly.
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Gold prices were also boosted by events in Venezuela, where President Donald Trump ordered a blockade of all sanctioned oil tankers. The U.S. leader has also pressed Venezuelan President Nicolás Maduro over the threat of a military buildup and ground strikes in the region.
“Tensions appear to be building gradually,” said David Wilson, senior commodities strategist at BNP Paribas. He said every factor supporting gold – from inflationary pressures to slowing U.S. stocks and global economic growth – appeared to be happening at the same time, and predicted that gold prices could reach $5,000 sometime next year.
Gold prices are not far from their all-time high of over $4,381 an ounce set in October. The precious metal is up more than 60% this year and is on track for its best annual performance since 1979. The precious metal’s strong rally was driven by increased central bank buying and a broad pullback from government debt and major currencies. Geopolitical tensions have also boosted its safe-haven appeal.
Investors are closely watching for any signs of further monetary easing after the Federal Reserve cut interest rates for a third consecutive week last week – a positive for the non-interest-paying precious metal. Currently, traders see less than a 25% chance of a price cut in January.
Nicky Shiels, head of research at precious metals refiner MKS Pamp SA, said gold prices are expected to reach $4,500 an ounce by 2026, joining others in forecasting further gains. Gold prices are likely to consolidate in the near term “before establishing a more modest and more sustainable bullish trajectory” after this year’s “parabolic surge,” Hills said in a note on Tuesday.
