Gold surges to new record, but anticipates stiff resistance at 2500

Gold prices have reached a new all-time high in the Asian trading session on Tuesday, March 2, 2021, surpassing the previous record of $2,067.30 set in August 2020. The precious metal is currently trading around $2,069 per ounce, with an intraday high of $2,073. This surge in gold prices comes amidst a confluence of factors that have fueled broader market apprehensions and increased demand for safe-haven assets.

One of the primary drivers of the gold price rally is the resurgence of inflation risks. The U.S. Consumer Price Index (CPI) rose by 0.4% in January, exceeding expectations of a 0.3% increase. This marked the largest monthly increase since the pandemic hit the economy last year. The core CPI, which excludes food and energy prices, also rose by 0.3%, the most significant increase since June 2018. This data suggests that inflationary pressures are building up, and the Federal Reserve may need to adjust its monetary policy accordingly.

Another factor contributing to the gold price rally is the geopolitical tension between major powers, particularly between the United States and China. The ongoing tensions between the world's two largest economies have increased uncertainty and instability in the financial markets. The escalating conflict over Taiwan and the potential for military action has further fueled demand for safe-haven assets like gold.

The shift in sentiment towards gold is also evident in the flows of institutional investors. According to data from the World Gold Council, global gold-backed ETFs saw inflows of $3.3 billion in January, the largest monthly inflow since July 2016. This trend is expected to continue as investors seek to protect their portfolios from market volatility and inflationary pressures.

However, despite the strong bullish momentum, gold faces stiff resistance around the $2,500 mark. This level has acted as a significant psychological barrier in the past, and a break above this level would be a significant milestone for the precious metal. If gold can overcome this resistance level, it could potentially reach new heights and challenge the all-time high of $2,067.30 set last year.

In conclusion, gold prices have reached a new all-time high of $2,069 per ounce amidst growing concerns over inflation risks and geopolitical tensions. The precious metal is currently trading around this level and faces stiff resistance around the $2,500 mark. The trend towards safe-haven assets is expected to continue, and gold is likely to remain a popular choice among investors seeking to protect their portfolios from market volatility and inflationary pressures.