Gold surged to fresh record highs on Monday, breaking decisively above the $5,100 an ounce threshold as investors flocked to the metal in response to escalating geopolitical uncertainty and heightened market volatility.
Spot gold jumped nearly 2.5% to an all-time high of $5,111.11 an ounce by 18:52 ET (00:52 GMT), while U.S. gold futures advanced by a similar margin to a record $5,145.39 an ounce.
The precious metal capped off another strong week, having climbed more than 8% over the previous five sessions and pushing its year-to-date gain to almost 17%. The rally has been fueled by a combination of geopolitical risk, expectations that U.S. monetary policy will turn more accommodative later in 2026, and sustained buying from central banks.
The surge extended across the precious metals complex. Silver leapt 6% to a new all-time high of $109.46 an ounce, and platinum rose 4% to a record $2,910.67 an ounce.
Geopolitical flare-ups and tariff rhetoric drive demand
A key factor behind gold’s strong performance this month has been the sharp rise in geopolitical tensions, particularly friction between the United States and NATO allies over Greenland, which has unsettled global financial markets.
President Donald Trump’s remarks on America’s strategic interests in the Arctic have strained transatlantic ties, raising concerns about broader diplomatic and economic repercussions.
Adding to the uncertainty, Trump reignited trade tensions with Canada over the weekend, threatening to impose a 100% tariff on Canadian imports if Ottawa proceeds with a trade agreement with China. In social media posts, he said Canada could be used as a “drop off port” for Chinese goods entering the United States and warned that Beijing would “eat Canada alive” if such a deal were struck.
Fed outlook in focus
Gold has also benefited from expectations around U.S. interest rates. The Federal Reserve is set to conclude its policy meeting on Wednesday, with markets largely anticipating that rates will be left unchanged.
While a pause is widely expected, investors will closely examine the Fed’s statement and comments from Chair Jerome Powell for clues on the timing and pace of potential rate cuts later this year. Lower interest rates tend to support gold by reducing the opportunity cost of holding a non-yielding asset.
“Both the data and Chair Powell’s robust defence of central bank independence indicate little prospect of a 28 January Fed rate cut,” analysts at ING said in a note.
“The focus will be on President Trump’s imminent nomination for the new Fed Chair, the upcoming data, and whether that person can corral the rest of the committee into further cuts,” they added.
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