Gold Trading Alert: With global uncertainty looming, gold and silver continue to hit record highs; be wary of short-term pullback risks.
2026-01-15 07:50:18
At the start of 2026, global financial markets witnessed a precious metals frenzy. Spot gold prices surged to a record high of $4642.77 per ounce on Wednesday (January 14th), while silver also soared to a peak of $93.48, setting remarkable records. This was not merely a numerical leap, but a collective action by investors seeking refuge amidst layers of uncertainty. Geopolitical tensions, volatile economic data, expectations surrounding Federal Reserve policy, and the shadow of political infighting in the United States all contributed to this bull market. Looking back at the market dynamics of the past week, we can see that gold's allure as a safe-haven asset is at its peak, but it also harbors potential risks. This article will delve into these factors, explore the underlying logic of the gold market, and forecast its future trends, helping readers seize opportunities amidst the ever-changing landscape.
The surge in gold prices stems primarily from the ongoing escalation of global geopolitical tensions. Iran recently issued a strong warning that it would strike US military bases in neighboring countries if the US intervened in its domestic protests, exacerbating tensions in the Middle East. Meanwhile, US President Trump reiterated his intention to control Greenland, leading to a meeting between the Danish and Greenlandic foreign ministers and the US Vice President, further highlighting the fragility of international relations. These events, like ticking time bombs, have spurred investors to flock to gold as a safe haven.
Spot gold closed at $4,626.41 per ounce on Wednesday, up nearly 0.9%, after hitting a record high of $4,642.77 during the session. Although it dipped slightly to around $4,600 in early Asian trading on Thursday (January 15), the overall momentum remained strong. Alex Ebkarian, COO of Allegiance Gold, aptly described the situation as "all roads lead to gold and silver," reflecting the diverse sources of market demand, including institutional investors, retail investors, and central bank reserves. In a structural bull market, this demand amplifies gold's appeal like a snowball.
Meanwhile, economic uncertainty also provided solid support for gold. US retail sales data for November exceeded expectations, rising 0.6%, higher than economists' forecasts of 0.4%. This should have boosted stocks and the dollar, but failed to reverse safe-haven demand amid weak inflation data. The Producer Price Index (PPI) rose 0.2% month-on-month, in line with expectations, but exceeded year-on-year growth, while the core Consumer Price Index (CPI) for December, released the previous day, was weaker than expected. Although these data were delayed due to the government shutdown, they revealed the complexity of the US economy: strong consumption accompanied by inflationary concerns. Traders therefore continue to bet on at least two rate cuts by the Federal Reserve this year, further strengthening gold's momentum, as a low-interest-rate environment reduces the opportunity cost of holding gold, making it more attractive relative to bonds and stocks.
Against the backdrop of gold's brilliance, silver's performance was equally impressive. Spot silver surged 7.2% on Wednesday, closing at $93.24 per ounce, and briefly touched a record high of $93.48. In early Asian trading on Thursday, it even slightly refreshed the record high to $93.67, although it subsequently retreated to around $91.10, but the fluctuations revealed a strong upward trend. Ebkarian optimistically predicts that silver will reach the $100 to $144 range in the short term, emphasizing that "there is no difference between silver at $100 and at $90," suggesting that the market is in a structural upward phase ignoring short-term fluctuations. Silver's rise not only benefits from the spillover effect of gold but also stems from the recovery of its industrial demand, such as its applications in new energy and electronics, transforming silver from a purely safe-haven asset into a multi-functional precious metal.
Other precious metals also joined the rally. Spot platinum climbed more than 5% to $2,444 per ounce on Wednesday, while palladium rose as much as 14% to $1,911 per ounce. The performance of these metals confirms the collective boom in the entire precious metals sector, with platinum group metals (PGMs) being considered the best performing asset class by Daniel Ghali, head of commodity strategy at TD Securities. He pointed out that the rise in PGMs is more driven by supply and demand fundamentals than by purely geopolitical factors, providing investors with opportunities for diversified allocation.
The Federal Reserve's role in this gold bull market has been indispensable, but its independence is facing unprecedented challenges. The Trump administration's threat to file criminal charges against Fed Chairman Powell has sparked collective support from central bank governors worldwide, and this political turmoil has directly amplified the market's crisis of confidence in US institutions. Powell dismissed the investigation as a "pretext" for the White House to pressure interest rates, while opinions within the Fed are clearly divided: Minneapolis Fed President Kashkari believes the labor market is resilient and inflation is above target, necessitating no short-term rate cuts; Atlanta Fed President Bostic emphasizes that the challenge of controlling inflation is not over and that restrictive policies need to be maintained; Fed Governor Milan points out that Trump's deregulation will put downward pressure on inflation, supporting rate cuts. CME's FedWatch Tool shows that the probability of a rate cut this month is only 5%, while the expectation of at least a 25 basis point rate cut in March is 27.2%, reflecting a strengthening market consensus that the Fed will maintain its current interest rates.
Meanwhile, the decline in US bond yields further corroborated this cautious sentiment. The 10-year Treasury yield fell to 4.138%, the 30-year to 4.794%, and the 2-year to 3.512%. A positive yield curve of 63.4 basis points is also seen as a positive signal for economic expectations. However, Ghali warned that the risks for gold are becoming polarized; it is no longer solely driven by central bank demand but is shifting towards an inflection point in the inflation trade. If the US government makes tactical mistakes, such as further undermining institutional credibility, gold could easily reach $5,000/ounce. Conversely, if investor sentiment shifts, the price correction could be far greater than before, as institutional holdings of physically backed gold ETFs have reached a record high of 65%.
Despite the booming gold bull market, potential risks cannot be ignored. In an interview, Ghali emphasized that the dynamics of the gold market are shifting from a fringe asset to a mainstream one, implying a significant increase in volatility. While inflation expectations have declined over the past year, weakened trust in US institutions has become a core driver of depreciation trading. If the Supreme Court's rulings on Trump's tariffs and the resignation of Federal Reserve governors are unfavorable, the dollar index could decline further (it already fell 0.1% to 99.07 on Wednesday), thus pushing up gold prices. Conversely, if inflation is well-controlled and market sentiment reverses, gold will face a significant correction. The Fed's Beige Book showed increased economic activity and stable employment, providing a buffer for the dollar, but geopolitical tensions such as the Iranian threat remain a lingering shadow. Ghali maintains a neutral stance on gold and suggests investors focus on further opportunities in platinum group metals.
In conclusion, the gold market had a stunning start to 2026. Driven by a combination of geopolitical, economic data, and policy uncertainties, gold and silver prices reached record highs, demonstrating strong structural bull market characteristics. Investors should be wary of two-way risks, but in the short term, gold is expected to maintain its upward trend and may even reach higher peaks. In this era of uncertainty, gold is not only an asset but also an anchor of confidence. Looking ahead, if the Federal Reserve maintains its independence and inflation expectations remain stable, the gold bull market may continue; conversely, greater uncertainty will create greater opportunities. Investors are advised to closely monitor Federal Reserve meetings and geopolitical developments, and rationally allocate precious metals to cope with potential storms.
(Spot gold daily chart, source: FX678)
At 07:49 Beijing time, spot gold was trading at $4,613.24 per ounce.
The driving force behind soaring gold prices: dual uncertainties in geopolitics and economics
The surge in gold prices stems primarily from the ongoing escalation of global geopolitical tensions. Iran recently issued a strong warning that it would strike US military bases in neighboring countries if the US intervened in its domestic protests, exacerbating tensions in the Middle East. Meanwhile, US President Trump reiterated his intention to control Greenland, leading to a meeting between the Danish and Greenlandic foreign ministers and the US Vice President, further highlighting the fragility of international relations. These events, like ticking time bombs, have spurred investors to flock to gold as a safe haven.
Spot gold closed at $4,626.41 per ounce on Wednesday, up nearly 0.9%, after hitting a record high of $4,642.77 during the session. Although it dipped slightly to around $4,600 in early Asian trading on Thursday (January 15), the overall momentum remained strong. Alex Ebkarian, COO of Allegiance Gold, aptly described the situation as "all roads lead to gold and silver," reflecting the diverse sources of market demand, including institutional investors, retail investors, and central bank reserves. In a structural bull market, this demand amplifies gold's appeal like a snowball.
Meanwhile, economic uncertainty also provided solid support for gold. US retail sales data for November exceeded expectations, rising 0.6%, higher than economists' forecasts of 0.4%. This should have boosted stocks and the dollar, but failed to reverse safe-haven demand amid weak inflation data. The Producer Price Index (PPI) rose 0.2% month-on-month, in line with expectations, but exceeded year-on-year growth, while the core Consumer Price Index (CPI) for December, released the previous day, was weaker than expected. Although these data were delayed due to the government shutdown, they revealed the complexity of the US economy: strong consumption accompanied by inflationary concerns. Traders therefore continue to bet on at least two rate cuts by the Federal Reserve this year, further strengthening gold's momentum, as a low-interest-rate environment reduces the opportunity cost of holding gold, making it more attractive relative to bonds and stocks.
Silver's dazzling performance: from follower to leader
Against the backdrop of gold's brilliance, silver's performance was equally impressive. Spot silver surged 7.2% on Wednesday, closing at $93.24 per ounce, and briefly touched a record high of $93.48. In early Asian trading on Thursday, it even slightly refreshed the record high to $93.67, although it subsequently retreated to around $91.10, but the fluctuations revealed a strong upward trend. Ebkarian optimistically predicts that silver will reach the $100 to $144 range in the short term, emphasizing that "there is no difference between silver at $100 and at $90," suggesting that the market is in a structural upward phase ignoring short-term fluctuations. Silver's rise not only benefits from the spillover effect of gold but also stems from the recovery of its industrial demand, such as its applications in new energy and electronics, transforming silver from a purely safe-haven asset into a multi-functional precious metal.
Other precious metals also joined the rally. Spot platinum climbed more than 5% to $2,444 per ounce on Wednesday, while palladium rose as much as 14% to $1,911 per ounce. The performance of these metals confirms the collective boom in the entire precious metals sector, with platinum group metals (PGMs) being considered the best performing asset class by Daniel Ghali, head of commodity strategy at TD Securities. He pointed out that the rise in PGMs is more driven by supply and demand fundamentals than by purely geopolitical factors, providing investors with opportunities for diversified allocation.
The Federal Reserve's Independence Crisis: The Fog of Monetary Policy Amidst a Political Storm
The Federal Reserve's role in this gold bull market has been indispensable, but its independence is facing unprecedented challenges. The Trump administration's threat to file criminal charges against Fed Chairman Powell has sparked collective support from central bank governors worldwide, and this political turmoil has directly amplified the market's crisis of confidence in US institutions. Powell dismissed the investigation as a "pretext" for the White House to pressure interest rates, while opinions within the Fed are clearly divided: Minneapolis Fed President Kashkari believes the labor market is resilient and inflation is above target, necessitating no short-term rate cuts; Atlanta Fed President Bostic emphasizes that the challenge of controlling inflation is not over and that restrictive policies need to be maintained; Fed Governor Milan points out that Trump's deregulation will put downward pressure on inflation, supporting rate cuts. CME's FedWatch Tool shows that the probability of a rate cut this month is only 5%, while the expectation of at least a 25 basis point rate cut in March is 27.2%, reflecting a strengthening market consensus that the Fed will maintain its current interest rates.
Meanwhile, the decline in US bond yields further corroborated this cautious sentiment. The 10-year Treasury yield fell to 4.138%, the 30-year to 4.794%, and the 2-year to 3.512%. A positive yield curve of 63.4 basis points is also seen as a positive signal for economic expectations. However, Ghali warned that the risks for gold are becoming polarized; it is no longer solely driven by central bank demand but is shifting towards an inflection point in the inflation trade. If the US government makes tactical mistakes, such as further undermining institutional credibility, gold could easily reach $5,000/ounce. Conversely, if investor sentiment shifts, the price correction could be far greater than before, as institutional holdings of physically backed gold ETFs have reached a record high of 65%.
Market Risks and Two-Way Game: Hidden Concerns in the Gold Bull Market
Despite the booming gold bull market, potential risks cannot be ignored. In an interview, Ghali emphasized that the dynamics of the gold market are shifting from a fringe asset to a mainstream one, implying a significant increase in volatility. While inflation expectations have declined over the past year, weakened trust in US institutions has become a core driver of depreciation trading. If the Supreme Court's rulings on Trump's tariffs and the resignation of Federal Reserve governors are unfavorable, the dollar index could decline further (it already fell 0.1% to 99.07 on Wednesday), thus pushing up gold prices. Conversely, if inflation is well-controlled and market sentiment reverses, gold will face a significant correction. The Fed's Beige Book showed increased economic activity and stable employment, providing a buffer for the dollar, but geopolitical tensions such as the Iranian threat remain a lingering shadow. Ghali maintains a neutral stance on gold and suggests investors focus on further opportunities in platinum group metals.
In conclusion, the gold market had a stunning start to 2026. Driven by a combination of geopolitical, economic data, and policy uncertainties, gold and silver prices reached record highs, demonstrating strong structural bull market characteristics. Investors should be wary of two-way risks, but in the short term, gold is expected to maintain its upward trend and may even reach higher peaks. In this era of uncertainty, gold is not only an asset but also an anchor of confidence. Looking ahead, if the Federal Reserve maintains its independence and inflation expectations remain stable, the gold bull market may continue; conversely, greater uncertainty will create greater opportunities. Investors are advised to closely monitor Federal Reserve meetings and geopolitical developments, and rationally allocate precious metals to cope with potential storms.
(Spot gold daily chart, source: FX678)
At 07:49 Beijing time, spot gold was trading at $4,613.24 per ounce.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
