Gold Hits Another Record Amid Geopolitical Concerns
Gold (XAU/USD) strengthened again on Thursday (January 29th), continuing the previous day's significant surge. Gold prices hovered around $5,522/ounce, briefly hitting a new record at around $5,597/ounce before entering a consolidation phase. The main drivers remained the same: rising volatility and a stronger flight to safety.
One of the most powerful triggers came from re-escalating geopolitical tensions. US-Iran risks returned to the spotlight after Washington issued a new warning of possible military action. Media reports indicated that President Donald Trump was considering a major attack on Iran, although a final decision had not yet been made.
The situation escalated after Trump wrote in Truth Social that a "massive armada" of US forces was heading toward Iran and urged Tehran to return to the negotiating table over its nuclear program. Trump also issued an ultimatum that "time is running out" and warned that the next attack would be "much worse." Such reactions typically immediately boost demand for safe havens—and gold is a prime target.
From a fundamental perspective, the World Gold Council (WGC) reported that global gold demand in 2025 will surpass 5,000 tons for the first time, driven by very strong investment flows. Central banks reportedly purchased 863 tons throughout the year, while global gold ETF holdings rose by 801 tons. Demand for coins and bars also rose to a 12-year high—a sign of expanding hedging interest.
At the same time, confidence in the US dollar has eroded, driving capital flows into hedge assets. The "debasement trade" is back in full swing—triggered by policy uncertainty, trade tensions, and concerns about the Fed's independence.
The Fed's decision to hold interest rates has not significantly changed market expectations, which still see the possibility of two cuts this year—a situation that typically supports gold because it does not provide a yield.
Source: Newsmaker.id
