Onome Amuge
Gold extended its rally on Monday, pushing through the $5,100 a troy ounce threshold as investors sought refuge in the traditional safe-haven amid intensifying geopolitical tensions and mounting uncertainty over US policy.
Spot gold rose 1.7 per cent to $5,069.17 an ounce, after earlier touching a record high of $5,111.11. US gold futures climbed 1.8 per cent to $3,107.24, close to last week’s peak of $5,145.39.
The metal gained more than 8 per cent last week, repeatedly setting new highs, and is up nearly 17 per cent so far this year. Analysts attribute the advance to a confluence of geopolitical risks, expectations of looser US monetary policy in 2026, and sustained buying by central banks.
Other precious metals also dwelled in bullish territory. Silver jumped 6 per cent to a record $109.46 an ounce, while platinum rose 4 per cent to a new high of $2,910.67.
A key catalyst for gold’s shine this month has been escalating tensions between the US and its Nato allies over Greenland, which have unsettled global markets. President Donald Trump’s rhetoric around US strategic interests in the Arctic has strained transatlantic relations and raised concerns about broader diplomatic and economic fallout.
Those concerns were compounded over the weekend when Trump escalated trade tensions with Canada, threatening to impose tariffs of up to 100 per cent on Canadian goods should Ottawa proceed with a trade agreement with China. Writing on his social media platform, Trump warned that Canada could become a “drop-off port” for Chinese exports into the US and claimed Beijing would “eat Canada alive” if such a deal were to proceed.
Gold has also been supported by expectations surrounding US monetary policy. The Federal Reserve is due to conclude its policy meeting on Wednesday, with markets widely expecting interest rates to be left unchanged. While a pause is largely priced in, investors will focus on the Fed’s statement and chair Jay Powell’s remarks for signals on the timing and pace of any rate cuts later this year.
Lower interest rates typically support gold by reducing the opportunity cost of holding non-yielding assets. “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. “The focus will be on President Trump’s imminent nomination for the new Fed chair, upcoming data, and whether that person can corral the committee into further cuts.”
Yardeni Research said the rally reflects a broader “geopolitical risk-on trade”, with rising global tensions driving gains across precious metals, base metals and rare earths. The firm said it had been calling for a “melt-up” in gold since early last year, a move that has since broadened well beyond bullion.
“This is all happening because rising geopolitical tensions are driving a military arms race, and defence companies need metals to increase output; their share prices are soaring as well,” Yardeni said.
Against that backdrop, the firm reiterated its bullish long-term outlook, forecasting gold at $6,000 an ounce by the end of this year and $10,000 by the end of 2029.
