Gold Breaks Another Record, What's Happening?
Gold rose to an all-time high (ATH), driven by a combination of geopolitical tensions and expectations of a Fed interest rate cut. This surge also solidified gold's position as one of the assets with the best annual performance in more than four decades.
In the latest session, gold rose more than 1% and broke its previous record of $4,390 per ounce set in October. The market believes this trend could continue as global sentiment remains unstable.
From a monetary policy perspective, market participants are betting the Fed will cut interest rates twice in 2026. Last week's economic data failed to provide strong clarity on the direction of the economy, while US President Donald Trump is also pushing for aggressive interest rate cuts. Lower interest rates are usually a boost for gold and silver, as neither pays interest.
From a geopolitical perspective, tensions in recent weeks have strengthened the appeal of safe havens. The US tightened its blockade of Venezuelan oil to pressure the government of President Nicolás Maduro, while Ukraine for the first time attacked oil tankers from Russia's "shadow fleet" in the Mediterranean Sea.
On a year-over-year basis, gold and silver are both heading for their strongest annual gains since 1979. Gold has surged by about two-thirds, driven by central bank buying and inflows into bullion-based ETFs. Gold ETFs have recorded five consecutive weeks of rising inflows, and World Gold Council data shows total holdings have risen every month this year except May.
Gold has also recovered quickly after falling from its October peak when the rally was deemed overheated. Goldman Sachs is among the banks predicting prices will continue to rise in 2026, with a base case of $4,900 per ounce and risks tilted higher. They believe ETF investors are beginning to “struggle” with central banks for physical supply.
Dilin Wu of Pepperstone believes central bank buying, physical demand, and geopolitical hedging remain the medium-to-long-term underpinnings, while Fed policy and real yields drive cyclical fluctuations. He also notes that new players—such as stablecoin issuer Tether and some corporate treasuries—are starting to allocate funds to gold, making the demand base more “resilient.”
Other precious metals also surged: silver rose 2.7% to a record $68.9883 an ounce, then settled at $68.87; platinum rose for the eighth straight session, breaking through $2,000 an ounce (its first since 2008) and has gained about 125% this year; palladium rose 4.5%. At 10:57 a.m. in Singapore, spot gold was up 1.1% at $4,386.32, platinum was up 3.9%, and the Bloomberg Dollar Spot Index was down 0.1%. (asd)
Source: Newsmaker.id
