Gold Breaks $4,700 as Haven Demand Intensifies
Spot gold hits fresh all-time high amid tariff fears and Fed uncertainty. Analysts now see $5,000 in first half of 2026.
Gold keeps finding reasons to break records.
Spot prices climbed above $4,700 per ounce Wednesday morning, pushing past Monday's previous high of $4,690 as the transatlantic tariff standoff continued driving haven flows. The move extends a rally that has lifted gold roughly 8% since New Year's Day.
For context: at the start of 2025, gold traded around $2,600. A year later, prices have nearly doubled.
The Catalyst Stack
No single driver explains the rally. It's the accumulation of uncertainty that's pushing investors toward the yellow metal.
Trump's tariff threats on European allies over Greenland triggered Tuesday's market selloff and intensified safe-haven demand. The proposed 200% duties on French champagne escalated rhetoric beyond what most traders expected.
Then there's the Fed. Treasury Secretary Scott Bessent confirmed at Davos that President Trump is close to nominating a new Fed chair, narrowing the field to four candidates. That announcement follows the Justice Department's probe into current Chair Jerome Powell—an unprecedented challenge to central bank independence.
Add ongoing uncertainty about US involvement in Venezuela and Iran, and the geopolitical risk premium has rarely looked so justified.
The Numbers
Gold touched $4,736 at its Wednesday peak before pulling back slightly to the $4,710 range. That's a gain of nearly $80 from Monday's close.
Silver followed, trading above $93 per ounce after hitting a record of $93.49 earlier in the week. The gold-silver ratio sits around 51—historically tight, suggesting silver could outperform if the precious metals rally continues.
Both metals have outpaced broader commodities. Oil remains volatile on geopolitical headlines, while copper and industrial metals trade sideways on mixed economic signals.
Wall Street Recalibrates
Price targets that seemed aggressive a month ago now look conservative.
HSBC raised its gold forecast, suggesting prices could reach $5,000 in the first half of 2026 on momentum and haven flows. That would represent another 6% upside from current levels—significant but not extreme given recent volatility.
JPMorgan's commodities team projects $5,055 per ounce by Q4 2026, rising toward $5,400 by late 2027. Their model assumes persistent geopolitical uncertainty and central bank buying continuing at 2025's elevated pace.
The most aggressive target comes from Yardeni Research at $6,000 by year-end—a call that requires tariff escalation, Fed instability, and sustained risk-off flows. Not impossible, but not the base case either.
The Structural Bid
Beyond trading flows, gold benefits from a fundamental shift in global reserve management.
Central bank gold purchases hit record levels in 2025 as emerging market institutions diversified away from dollar assets. China, Russia, India, and Turkey led buying, but even traditionally Western-aligned central banks added positions.
According to IMF data, the market value of gold held by foreign central banks has overtaken their holdings of US Treasuries for the first time in decades. That's a profound change in how countries think about reserve assets.
The trend shows no signs of reversing. If anything, Trump's aggressive use of tariffs and sanctions reinforces the rationale for reducing dollar exposure.
Trading Considerations
Gold's move creates dilemmas for portfolio managers.
The metal has delivered extraordinary returns—66% in 2025 and another 8% year-to-date. Chasing that momentum at $4,700 means accepting higher entry risk. Sharp reversals are common when sentiment becomes one-sided.
Remember silver's December pullback: after briefly touching $80, prices dropped 15% in days as profit-taking overwhelmed haven flows. Gold is more stable than silver but not immune to corrections.
The bull case requires continued uncertainty. If Trump softens his tariff stance and the Fed transition proceeds smoothly, gold could consolidate or pull back. The Davos comments suggesting negotiation over Greenland offer a glimpse of what de-escalation might look like.
For traders, the risk-reward has shifted. Gold was a screaming buy at $2,600 when few believed in the rally. At $4,700, you're paying up for protection that may or may not prove necessary.
The allocation question is different. A 5-10% gold position in a diversified portfolio makes structural sense in an era of heightened geopolitical risk—regardless of short-term price direction.