Gold prices experienced a notable rally last week, driven by strong haven demand and growing expectations of further interest rate cuts in the United States. Spot gold prices were recently up 1.3 per cent, reaching $US4509.20 an ounce. The increase coincides with escalating geopolitical uncertainty, including the capture of Maduro and ongoing protests in Iran, contributing to both short- and long-term market anxieties.
Analysts at ANZ suggest that the current climate is likely to bolster central bank purchasing activity and attract substantial investor inflows into gold. The precious metal is often seen as a safe store of value during times of economic and political instability.
Adding to the upward pressure on gold, recent US non-farm payroll (NFP) data revealed that employers added fewer jobs in December than anticipated. In response to this data, traders are increasingly pricing in the likelihood of two interest rate cuts in 2026, according to ANZ analysis. This anticipation further supports the attractiveness of gold as an investment, as lower interest rates typically diminish the appeal of yield-bearing assets, making gold relatively more attractive.
