Gold prices are edging closer to the $5,000-an-ounce mark, propelled by a resurgence in geopolitical risk and growing unease over the independence of the U.S. Federal Reserve — dynamics that have pressured the dollar and intensified flows into hard-asset safe havens.
Spot gold climbed to a fresh record of $4,967.48 an ounce, extending weekly gains to roughly 8%, while February futures traded at $6,969.69. Silver followed closely behind, jumping to an all-time high of $99.38 an ounce in spot trading.
After posting its strongest annual performance since 1979, gold’s momentum has remained striking. The metal is up a further 15% so far this year, supported by renewed criticism of the Federal Reserve from U.S. President Donald Trump, U.S. military action in Venezuela and renewed rhetoric around annexing Greenland. Together, these developments have revived what investors describe as the “degrade trade,” characterised by a retreat from government bonds and fiat currencies in favour of alternative stores of value such as gold.
“Gold is going through a gradual repricing as fractures emerge in the post-war, rules-based global order,” said Yuxuan Tang, head of Asia macro strategy at JP Morgan Private Bank. “More investors are coming to view gold as a dependable hedge against these difficult-to-measure regime-change risks,” he added.
Supply constraints are adding to price sensitivity. “Gold supply is not sufficient to absorb U.S. market and political tensions, which makes price ceilings particularly fragile,” said Ahmad Assiri, a strategist at Pepperstone Ltd Group.
Central-bank demand continues to provide a powerful tailwind. Poland’s central bank — currently the world’s largest buyer of gold — approved plans this week to acquire an additional 150 tonnes amid rising geopolitical uncertainty. At the same time, India’s holdings of U.S. Treasuries have fallen to a five-year low, while allocations to gold and other alternative assets have increased, reflecting a broader effort by some major economies to diversify away from the world’s largest bond market.
Investors are also closely watching Washington. Markets are awaiting President Trump’s nomination for the next Federal Reserve chair after he said discussions with candidates had concluded and reiterated that he has a preferred choice. A more dovish appointment would likely reinforce expectations for additional rate cuts this year — a supportive backdrop for precious metals following three consecutive reductions.
Geopolitical negotiations remain in focus as well, with markets tracking talks between Russian President Vladimir Putin and U.S. envoys Steve Witkoff and Jared Kushner on a proposed peace plan aimed at ending the war in Ukraine.
Bullish momentum has prompted major banks to lift their forecasts. Goldman Sachs recently raised its year-end gold price target to $5,400 an ounce from $4,900, citing strong demand from private investors and central banks. The bank said the rally is being driven by persistent inflows into Western ETFs and continued purchases by emerging-market central banks, estimated at around 70 tonnes per year in 2026, as part of an ongoing currency-diversification trend.
JP Morgan forecasts an average gold price of around $5,055 in the fourth quarter of 2026, underpinned by still-elevated official-sector demand of roughly 755 tonnes annually — well above pre-2022 levels — and a gradual reallocation toward gold within institutional portfolios.
Other global lenders, including UBS, Bank of America, Morgan Stanley and Deutsche Bank, are clustering around 2026 price targets of $4,800 to $5,000 an ounce. Some projections anticipate a sustained move above $5,000 between late 2026 and 2027, supported by persistent geopolitical strain, concerns over global debt sustainability, a potential revival in ETF inflows and mine supply struggling to keep pace.
Strategists increasingly argue that gold is “breaking historical norms.” Following its surge in 2025 and fresh highs in 2026, the metal is widely viewed as a potential top-performing asset again this year. Still, analysts warn that any easing of fiscal or monetary stress — or waning demand for macro hedges — could trigger profit-taking and introduce sharper volatility along the path to projected price levels.
Silver, riding gold’s rally, has more than tripled over the past year. The metal has also been supported by an unprecedented short squeeze and a surge in retail buying, forcing banks and refiners to scramble to meet exceptional physical demand.
Uncertainty around potential changes to China’s export-licensing regime has further amplified scarcity concerns, while volatility remains elevated even after the United States refrained from imposing broad tariffs on imports of key minerals, including silver and platinum.
According to Robert Gottlieb, a former precious-metals trader, elevated prices and sharp market swings have fundamentally altered risk-taking behaviour across the banking sector. Banks now “have to cut their positions significantly, which results in higher volatility and wider spreads,” he said.
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