The Sharp Drop in U.S. Treasury Yields and the Dollar, Combined with Chinese Demand and Global Uncertainty, Boosts Gains for the Precious Metal.
The gold reached a new historic closing record on Monday (8). The movement was driven by a combination of factors, including the drop in Treasury yields and the devaluation of the dollar. Additionally, the strong demand coming from China and an uncertain geopolitical environment increase the demand for the metal as a safe asset.
Dollar Decline and Interest Rates in the U.S. Boost the Metal
On Comex, the metals division of the New York Stock Exchange (Nymex), the gold contract due in December recorded a rise of 0.66%, closing at US$ 3,677.40 per troy ounce. During the session, the asset reached a historic high of US$ 3,685.70.
According to Fawad Razaqzada, a market analyst at StoneX, the weak U.S. labor market data released last Friday (5) “solidified” expectations that the Federal Reserve (Fed) will implement interest rate cuts. This perspective makes gold more attractive to investors.
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Chinese Appetite for Gold Remains Strong
The international scenario also contributes to the appreciation. China’s gold reserves showed growth for the tenth consecutive month, according to data released on Sunday (7), signaling robust and ongoing demand for the metal.
Geopolitical Landscape Increases Demand for Security
The geopolitical tensions add a layer of uncertainty that benefits safe assets. On Saturday (6), Russia launched its largest offensive against Ukraine since the start of the conflict. In response, European leaders accelerated discussions on a new package of economic sanctions to limit Russian revenue. According to the Financial Times, the European Union is considering secondary sanctions against China, a measure that would depend on coordinated action with the United States.
Analyses Point to Possible Volatility Ahead
Despite the optimism, some analysts take a more cautious stance. TD Securities assesses that gold may have less room for further gains. For the institution, recent records increase the metal’s vulnerability to changes in macroeconomic sentiment. Razaqzada at StoneX adds that the gold rally will be tested in the coming days with the release of new U.S. economic data, including consumer inflation data.

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