Gold prices surged sharply on Monday, breaching the $4,600 per ounce mark for the first time ever, as a combination of geopolitical tensions, softer US economic data and rising expectations of interest rate cuts fuelled strong safe-haven demand. Silver also joined the rally, hitting an all-time high alongside gains across the broader precious metals complex.
Geopolitical risks drive safe-haven demand
One of the key triggers behind the surge in gold prices has been the sharp escalation in geopolitical uncertainty. Unrest in Iran has intensified, with rights groups reporting that over 500 people have been killed amid widespread protests. Tensions have further risen after Iran warned of targeting US military bases if President Donald Trump follows through on renewed threats of military action.
Adding to global instability, the US has taken aggressive geopolitical postures elsewhere, including the removal of Venezuelan President Nicolás Maduro and renewed discussions around acquiring Greenland. These developments have heightened global risk aversion, prompting investors to move towards safe-haven assets such as gold and silver.
US jobs data strengthens rate-cut expectations
Gold’s rally was also supported by weaker-than-expected US employment data released last week. December job growth slowed significantly, with losses reported in key sectors such as construction, retail and manufacturing. While the unemployment rate edged lower, the overall data reinforced expectations that the US labour market is cooling.
Markets are now pricing in at least two Federal Reserve rate cuts this year, as a softer jobs environment reduces pressure on the central bank to keep policy tight. Lower interest rates tend to support non-yielding assets like gold, making the metal more attractive relative to bonds and other yield-generating instruments.
Fed uncertainty adds to market anxiety
Investor sentiment has also been shaken by political pressure on the Federal Reserve. Fed Chair Jerome Powell recently disclosed that the Trump administration had threatened him with criminal charges related to past congressional testimony, a move he described as an attempt to pressure the central bank into cutting rates. This has added to concerns over policy independence and financial stability, further boosting demand for precious metals.
Silver and other metals follow gold higher
Silver prices jumped more than 4%, touching a fresh all-time high above $83 per ounce, benefiting from both safe-haven flows and expectations of easier monetary policy. Platinum and palladium also recorded strong gains, with platinum nearing record levels and palladium rising over 4% during the session.
Outlook remains bullish
Analysts remain optimistic on the outlook for gold. HSBC has projected that gold prices could climb to $5,000 per ounce in the first half of 2026, citing rising geopolitical risks, growing government debt and sustained demand from investors seeking stability.
With global uncertainty showing little sign of easing and monetary policy expected to turn more accommodative, gold’s record-breaking rally appears to be underpinned by strong fundamentals rather than short-term speculation.
