On January 26, the gold market saw another milestone: spot gold surpassed the key psychological level of $5,000 per ounce for the first time. This achievement comes only about 100 days after gold broke through the $4,000 level.

As of press time, spot gold was up 1.77% hit a new all-time high of $5,076 per ounce.

In 2025, international gold prices soared more than 60%, marking the largest annual gain since 1979. Last week, gold rose by 8%, and it has accumulated nearly 17% gains so far this year.

Analysts attribute gold's surge to a wave of central bank buying, escalating geopolitical tensions, and a weakening US dollar.

Currently, global central banks are staging a new round of gold purchases. According to a recent report by the World Gold Council, central banks continued net purchases in November last year, totaling 45 tons—remaining elevated compared to earlier months in 2025. By November’s end, central banks had collectively bought 297 tons in 2025, with major buyers including Poland, Kazakhstan, Brazil, Turkey, and China.

Last week, the Polish central bank announced approval for a plan to purchase up to 150 tons of gold, aiming to boost its total reserves to 700 tons.

Data from the People's Bank of China showed China's official gold reserves reached 74.15 million ounces at the end of December 2025, with an increase of 30,000 ounces that month. Notably, this marked the 14th consecutive month of gold buying since November 2024, infusing the market with long-term confidence.

Furthermore, intensifying geopolitical tensions have driven investors toward gold as a safe haven. Recently, a deepening discord between the US and Europe over Greenland has added to global uncertainty. Despite President Trump ruling out the use of force against Denmark, his ambitions to acquire the Arctic island persist, increasing pressure on the EU to make concessions.

In addition, the declining US dollar has further boosted demand for gold. With President Trump again raising tariffs, calls to "sell America" have grown. The Bloomberg Dollar Spot Index fell 1.6% last week, its largest weekly drop since May, making gold more affordable for global buyers.

It is also worth highlighting that gold’s appeal as a haven asset and protection against currency depreciation have overshadowed traditional market headwinds such as stable interest rates. Typically, rate cuts by the Federal Reserve favor gold by lowering the relative attractiveness of holding US dollar assets, reducing the opportunity cost of non-yielding assets like gold.

The Federal Reserve is scheduled to hold its monetary policy meeting this week. Markets broadly expect no change, with CME FedWatch Tool data indicating rate cuts are unlikely before June.

Wall Street Sees Gold at $6,600

Looking ahead, Wall Street investment banks remain notably bullish on gold’s prospects. Jefferies is the most aggressive, predicting gold may reach $6,600 per ounce this year.

Goldman Sachs recently raised its year-end forecast to $5,400 per ounce, up from the previous $4,900, citing diversified private sector investment and heightened demand from central banks. Their report notes the pace of gold's rise has accelerated since 2025 as central banks compete with private investors for the limited supply.

Bank of America also increased its short-term gold target to $6,000 per ounce. In his client note, analyst Michael Hartnett wrote: “History cannot predict the future, but reviewing four past gold bull markets, prices surged by about 300% over an average of 43 months. Based on this, gold could reach $6,000 per ounce in spring 2026.”

Independent analyst Ross Norman forecasts a 2026 high of $6,400 per ounce, averaging $5,375.

Ole Hansen, head of commodity strategy at Saxo Bank, recently remarked that “fear of missing out” is now driving investors into gold as prices repeatedly break records. He cautioned, however, that it would be a mistake to attribute gold’s rally solely to speculation. The current macro environment remains supportive of gold. With governments persistently increasing debt and no clear path to long-term sustainability, central banks’ robust demand for gold underscores its role as a key tool for diversified reserves.

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