Why Gold Hits Record High Despite Three-Week Dollar Surge

Macquarie's Global Foreign Exchange and Interest Rate Strategist stated: "If the U.S. economic data were not so strong, especially relative to other countries, then the policy trends of the Federal Reserve and other central banks would not be so markedly different, at least not showing a contrary direction in tone and rhetoric, which is what is driving the U.S. dollar higher."

Despite the strengthening of the U.S. dollar, spot gold prices still rose by more than 1% on Tuesday, influenced by factors such as the demand for safe-haven assets stimulated by the Middle East war.

On Tuesday, spot gold closed up by $29.19, a 1.07% increase, at $2,748.68 per ounce; the gold price touched a historical high of $2,748.89 per ounce during the session.

Zaner's Vice President and Senior Metal Strategist, Peter A. Grant, said: "Geopolitical tensions remain the main driving factor. Therefore, a considerable amount of political uncertainty is also driving security and safe-haven interest in gold."

On Wednesday, during the Asian trading session, spot gold fell back, dropping to a low of $2,737.84 per ounce. In terms of Middle East news, sources revealed that Israel is considering a two-week ceasefire with Hamas, with easing safe-haven sentiment, weakening the upward momentum of gold prices.

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An Israeli official told NBC News on Tuesday that Israeli officials are considering Egypt's proposal for a small-scale ceasefire with Hamas to promote a larger ceasefire agreement. Previously, U.S. Secretary of State Blinken resumed diplomatic efforts towards Israel.

The unnamed official stated that the Israeli Security Cabinet has discussed Egypt's proposal for a two-week ceasefire in Gaza, with the release of only six hostages as a condition of exchange. This is a suggestion from the Chief Executive Officer who took office last week.

Blinken arrived in Israel earlier on Tuesday, as part of a trip to the Middle East, aimed at resuming ceasefire negotiations to end the escalating regional conflict following the death of Hamas leader Sinwar Yahya.

The Israeli official said: "Our idea is that reaching a large ceasefire agreement has always been challenging, so a small agreement can be reached first to build momentum." The official warned that although Israeli leaders have discussed this proposal, it has not yet been approved.

It is currently unclear whether Hamas is willing to accept a smaller-scale agreement.In terms of gold, on Tuesday, the overall gold price showed an upward trend. The highest price of the day rose to 2748.77, and the lowest fell to 2718.76, closing at 2748.74. Looking back at the performance of the gold market on Tuesday, after the market opened in the morning, the price was supported in the short term by the four-hour support and went straight up. After the European market fluctuated, the US market started to rise again, and the price set a new historical high.