Safe Haven Euphoria: Gold Soars
Gold prices rose sharply again on Tuesday (January 20th), hitting a new record, breaking through the psychological barrier above $4,700 per ounce. This rise was driven by a "flight to safety" as geopolitical tensions escalated and trade war concerns resurfaced in global markets.
On the spot market, gold rose more than 3% to around $4,750/oz, after hitting an intraday peak of $4,766.10/oz. US gold futures for February delivery closed 3.7% higher at $4,765.80/oz. This movement indicates that demand for gold remains strong despite prices reaching unprecedented levels.
The trigger came from a combination of risk factors. The main issue causing market tension was the re-escalation of US-European tensions over Greenland, after Trump threatened new tariffs against several European countries. This situation reinforced the "risk-off" mood, prompting investors to reduce positions in risky assets and shift funds to defensive instruments like gold.
The weakening US dollar also provided additional support. When the dollar falls, dollar-priced gold becomes cheaper for buyers using other currencies. This effect typically strengthens the precious metals rally, especially when the market is sensitive to geopolitical news and trade policy.
Furthermore, the market is still assessing the direction of US interest rate policy. Expectations of interest rate cuts make gold more attractive, as it offers no yield. When interest rates are expected to fall, the "opportunity cost" of holding gold becomes lower. Reuters reported that the market is pricing in the possibility of two 25-bps cuts by mid-2026, and concern grew after US Treasury Secretary Scott Bessent signaled that Trump could appoint a new Fed chair as early as next week.
Silver was also boosted by the safe-haven wave and the general precious metals rally. Silver briefly reached a record high of $95.87/oz, before falling slightly to around $94.37/oz due to profit-taking after its rapid rise. Reuters also noted that silver surged significantly throughout 2025, with the rally continuing in early 2026, making its volatility likely to be wilder than gold.
Other precious metals moved mixed. Platinum rose about 2.8% to $2,440.94/oz, while palladium fell about 0.7% to $1,828.39/oz. This divergence suggests the market isn't solely driven by the "safe-haven" theme, but is also influenced by factors specific to each metal, including industrial demand and speculative positioning.
Source: Newsmaker.id
