Gold surged to an unprecedented high above US$4,600 an ounce on Monday, extending a powerful rally as investors sought safety amid mounting geopolitical tensions and fresh uncertainty over US monetary policy following revelations of an investigation involving Federal Reserve Chairman Jerome Powell.
Spot gold climbed about two percent to breach the US$4,600 mark for the first time, before easing slightly later in the session, according to data from financial markets group LSEG. The precious metal has gained roughly six percent so far this year, building on last year’s extraordinary rise.
Market participants said the latest gains were driven by a confluence of political risk, expectations of looser monetary policy and escalating flashpoints in the Middle East and Latin America.
Gold’s ascent gathered pace after Powell confirmed that federal prosecutors were examining a US$2.5 billion renovation of the Federal Reserve’s headquarters in Washington, as well as aspects of his testimony to Congress. The investigation has revived speculation over whether the long-serving Fed chief could face pressure to step down before the end of his term.
Powell said the probe stemmed from long-running criticism by President Donald Trump, who has repeatedly expressed frustration with the central bank’s reluctance to cut interest rates as sharply or as quickly as he has advocated.
Analysts said the prospect of leadership change at the Fed had injected a new layer of policy uncertainty into markets.
“Especially if it results in him stepping down and being replaced by someone more inclined toward aggressive rate cuts, that would be supportive for gold,” said Jon Mills, an equity analyst at Morningstar.
Gold typically benefits from lower interest rates, as they reduce the opportunity cost of holding a non-yielding asset. That dynamic has been reinforced by recent US economic data pointing to a cooling labour market, which has strengthened expectations that borrowing costs could fall sooner than previously anticipated.
Beyond monetary policy, geopolitical risks have played a central role in driving demand for the precious metal.
Tensions involving Iran resurfaced after Washington signalled it was weighing options to respond to unrest in the country, while developments in Venezuela further unsettled markets. The United States launched a military operation there earlier this year, culminating in the capture of President Nicolas Maduro over the weekend, according to US officials.
The events have underscored what investors see as a volatile and unpredictable global landscape.
“They add to the narrative of heightened geopolitical uncertainty, which is why we see gold as one of our highest-conviction asset classes this year,” said Rajat Bhattacharya, a senior investment strategist at Standard Chartered.
Although the situation in Venezuela appears to be moving toward a swift resolution, analysts said the episode highlighted the risk of sudden flare-ups across multiple regions.
“In such an environment, gold continues to receive strong support,” said Eli Lee, an analyst at Bank of Singapore, adding that geopolitical unpredictability was likely to remain a defining feature of global markets.
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Structural factors are also bolstering the metal’s appeal, Lee said, as investors reassess portfolio allocations after years marked by sanctions, geopolitical fragmentation and increasingly complex interactions between fiscal and monetary policy.
Major banks have begun to lift their price expectations. HSBC said trading momentum could push gold prices toward $5,000 an ounce in the first half of 2026, even as volatility increases and periodic pullbacks become more frequent.
The London-based bank attributed the rally to sustained safe-haven demand, a weaker US dollar and elevated policy uncertainty. Its foreign-exchange strategists expect the greenback to remain under pressure into 2026, further supporting bullion prices.
“Rising fiscal deficits in the United States and other major economies are encouraging gold demand and may prove a key driver going forward,” HSBC said.
Central banks are also expected to remain net buyers this year as they continue to diversify reserves away from the dollar, although analysts caution that purchases may slow from the record levels seen between 2022 and 2024 due to elevated prices.
Gold rose nearly 65 percent in 2025, marking its strongest annual performance in decades, and Monday’s record high underscores its enduring role as a refuge in times of global stress.
