Gold staged a powerful rally during Monday’s session, breaking decisively above the $5,000 per ounce threshold and setting fresh all time highs, extending the momentum that began last week. This move reflects a clear shift in investor behavior toward defensive assets, amid rising geopolitical risks and growing uncertainty across global markets.
In price terms, spot gold climbed around 1.1% to a record high of $5,035.83 per ounce, while U.S. gold futures followed suit, reaching a new peak near $5,074.71 per ounce. These gains came on the back of weekly advances exceeding 8%, pushing gold’s year to date performance close to 17%, underscoring the strength of the prevailing uptrend and the broadening base of demand.
The positive momentum spilled over into other precious metals. Silver surged more than 2% to hit a historic high of $106.56 per ounce, while platinum posted modest gains, sufficient to register a new peak around $2,798.46 per ounce, highlighting an overall improvement in hedging demand across the sector.
Several factors are underpinning this strong performance, most notably the escalation of geopolitical tensions, alongside market expectations for a more accommodative U.S. monetary policy stance in 2026. In addition, sustained buying from central banks and institutional investors has played a key role in reinforcing the upward trend, particularly amid heightened volatility in equity and currency markets.
One of the main catalysts behind gold’s accelerated rise this month has been the intensifying dispute between the United States and its NATO allies over Greenland, which has prompted a repricing of political risk and unsettled global markets. U.S. statements regarding strategic interests in the Arctic region have strained transatlantic relations, further boosting gold’s appeal as a hedge.
Concerns were amplified by renewed trade tensions with Canada, after U.S. President Donald Trump threatened to impose steep tariffs on Canadian imports should Ottawa proceed with a trade agreement with China. Such developments have revived fears of supply chain disruptions and escalating trade conflicts scenarios that traditionally favor gold.
From a monetary policy perspective, markets are closely watching the outcome of the upcoming Federal Reserve meeting, with expectations firmly tilted toward keeping interest rates unchanged. While this outcome is largely priced in, investor focus remains on the tone of the Fed’s statement and Chair Jerome Powell’s remarks for clues on the timing and pace of potential rate cuts ahead.
Historically, gold tends to benefit from lower interest rate environments, as the opportunity cost of holding non yielding assets declines. In this context, analysts at ING noted that current data and the Fed’s stance suggest limited prospects for an imminent rate cut, adding that attention will increasingly shift toward political developments surrounding Fed leadership and forthcoming economic data.
Overall, gold’s breakout to unprecedented levels signals a deeper structural shift in investor positioning, leaving the metal well placed to remain supported should geopolitical risks intensify further or global monetary conditions turn more accommodative.
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