Gold Shows ‘Unprecedented Strength’ in Record Rally. Warning Signs Are Flashing.

Gold prices surged to a record high, potentially marking the seventh consecutive day of gains, as the precious metal defies market downturns. Continuous-contract gold futures rose 1.3% to reach $2,312.50 per troy ounce, setting a new all-time high and increasing 11.5% year-to-date. Despite declines in stock and bond markets, gold has risen 4.3% over the past five days.
Analysts attribute this rally to various factors, including expectations of Federal Reserve interest rate cuts and inflation hedging. Central bank buying, particularly from China, has also supported gold prices. However, some analysts warn that the rapid pace of gains raises concerns of a potential pullback, noting that the gold price is 15% above its 200-day simple moving average.