Gold crosses $5,200 an ounce for first time amid geopolitical, policy uncertainty

Gold prices rose to an all-time high on Wednesday (January 28), crossing $5,200 an ounce, as investors turned to safe-haven assets amid ongoing geopolitical tensions and policy uncertainty.

Gold has gained more than 18%

so far this year, extending last year’s rally. The move reflects persistent concerns over global trade, fiscal risks in the US, and expectations that interest rates could ease later in the year.

Market unease deepened after US President Donald Trump said Washington plans to impose new tariffs on South Korean imports, while the risk of a partial US government shutdown ahead of the January 30 funding deadline also weighed on sentiment.

Investors are closely tracking the US Federal Reserve’s policy meeting this week. While rates are expected to remain unchanged, markets are focused on Fed Chair Jerome Powell’s commentary for cues on the outlook for monetary easing and the central bank’s policy stance.

Structural factors continue to support gold. Central bank buying has remained strong as countries diversify reserves, while geopolitical risks have sustained investor demand. “Rallies typically end when the factors that drive investors into gold fade, and that is not what we are seeing,” said Michael Widmer, commodities strategist at Bank of America.

Rising participation has accompanied the price surge. CME Group said its metals complex recorded a single-day volume of more than 3.3 million contracts on January 26, the highest on record.

Global banks have turned more constructive on gold’s outlook. Deutsche Bank and Societe Generale expect prices to reach $6,000 an ounce by the end of the year.

UBS Global Research also sees further upside in the near term.

“We expect new highs over the next couple of quarters before prices stabilise at higher levels later in the year,” said Joni Teves, Precious Metals Strategist at UBS Global Research, adding that gold could average around $5,200 an ounce in 2026.

In India, higher gold prices have lifted household wealth valuations but are unlikely to translate into a broad-based boost in consumption. “The gold-related wealth effect is less effective in supporting household consumption, as Indian households generally prefer not to sell gold even when prices are high,” said Tanvee Gupta Jain, Chief India Economist at UBS Securities.

She added that elevated prices have instead supported growth in gold-backed lending.