Gold (XAU/USD) continues its powerful upward momentum, extending last week’s explosive rally to a sixth consecutive day and printing a new all-time high during Monday’s Asian session. Prices are hovering close to the $5,100 level as investors increasingly rotate into traditional safe-haven assets amid ongoing geopolitical tensions and trade-related uncertainty. Expectations of further monetary easing by the US Federal Reserve, sustained central-bank purchases, and record inflows into gold-backed exchange-traded funds are further fueling the metal’s relentless advance.
At the same time, capital has been flowing out of US assets as economic and policy risks intensify following renewed tariff threats from US President Donald Trump. Concerns over the US government’s stance toward the Federal Reserve’s independence, combined with rising worries about government debt, have pushed the US Dollar (USD) to its weakest level since September 2025. This sharp dollar weakness continues to provide strong tailwinds for gold prices. Market participants are now awaiting the outcome of the two-day FOMC meeting on Wednesday, which could offer clearer signals on the Fed’s future rate-cut trajectory and set the near-term direction for both the USD and the non-yielding yellow metal.
Daily Digest Market Movers: Gold supported by global risk aversion and bearish USD
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Recent tensions between the United States and NATO over Greenland have raised concerns about cohesion within the alliance. Meanwhile, US-brokered talks between Ukraine and Russia concluded their second day in Abu Dhabi on Saturday without producing a breakthrough agreement.
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Adding to geopolitical uncertainty, President Donald Trump stated on Saturday that the US would impose a 100% tariff on Canada should it proceed with a trade agreement with China. These developments continue to drive investors toward gold, pushing prices to fresh record highs for the sixth straight day.
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The broader de-dollarization narrative and growing expectations that the Federal Reserve could cut interest rates twice more in 2026 have weighed heavily on the USD, which has fallen to a four-month low—another key factor supporting gold’s rally.
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China’s central bank extended its gold-buying streak for a fourteenth consecutive month in December. In addition, emerging-market central banks, including the National Bank of Poland, the Reserve Bank of India, and the Central Bank of Brazil, remained active buyers into early 2026.
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Investment demand through gold-backed ETFs surged by 25% in 2025. Total gold holdings climbed to 4,025.4 tonnes from 3,224.2 tonnes in 2024, while total ETF assets under management reached $558.9 billion.
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The growing “Sell America” sentiment—driven by tariff disputes, concerns over Fed independence, and persistent fears about rising US debt—continues to underpin gold prices.
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Market attention now turns to the closely watched two-day FOMC meeting beginning Tuesday, with the policy decision due on Wednesday. Investors will focus on the Fed’s statement and Chair Jerome Powell’s press conference for clues on the future policy outlook.
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Powell’s remarks are expected to be a key driver for both the USD and gold in the days ahead. In the near term, US Durable Goods Orders data on Monday could offer short-term trading opportunities.
