Gold extended its historic rally on Wednesday, pushing to within striking distance of $4,900 per ounce, as escalating geopolitical tensions and turmoil in global bond markets intensified demand for safe-haven assets.
Spot gold jumped as much as 2% to a fresh record of $4,887.19 an ounce, marking the first time the precious metal has ever traded above the $4,800 level. The move follows a rapid sequence of breakouts, with gold only crossing $4,700 per ounce for the first time just a day earlier.
The precious metal is coming off its strongest annual performance since 1979, fuelled by mounting geopolitical risks and a growing global shift away from fiat currencies. Over the past 12 months, gold has surged by around 75%, setting new record highs on more than 50 occasions throughout 2025 and into early 2026.
Geopolitical Risks and Debt Fears Drive Gold Higher
The latest leg of the rally has been reignited by rising tensions between the United States and its NATO allies. Over the weekend, US President Donald Trump threatened tariffs on eight European nations opposing his proposal to take control of Greenland, raising fears of a renewed and potentially damaging global trade war.
At the same time, a sharp sell-off in Japanese government bonds has sent shockwaves through global markets. Long-dated US Treasuries and the US dollar both weakened earlier this week, amplifying concerns over fiscal sustainability in major economies and accelerating the so-called “debasement trade”, where investors seek refuge from currencies and government debt.
The turmoil has also raised fears of capital repatriation to Japan as domestic yields climb, further unsettling global financial markets.
“Gold’s rally is about trust,” said Daniel Ghali, senior commodity strategist at TD Securities. “For now, trust has bent, but hasn’t broken. If it breaks, momentum will persist for longer.”
Central Bank Buying Remains a Key Support
Gold continues to find strong backing from central banks. The National Bank of Poland has approved plans to purchase an additional 150 tonnes of gold, while Bolivia’s central bank has resumed gold buying for its foreign reserves following new regulations introduced in December 2025.
“Gold remains our highest-conviction call,” said Daan Struyven, co-head of commodities research at Goldman Sachs, reaffirming the bank’s base-case forecast for gold to reach $4,900 per ounce, with risks skewed to the upside amid sustained central-bank demand.
Silver Pulls Back After Record High
Meanwhile, silver prices eased more than 1% on Wednesday after hitting a record $95.89 per ounce in the previous session. The white metal has been a major beneficiary of the precious-metals boom, surging an extraordinary 140% in 2025.
Despite near-term volatility, analysts remain constructive on silver’s outlook for 2026.
“Silver reaching a three-digit price is increasingly possible given the momentum we’re seeing,” said Soni Kumari, commodity strategist at ANZ. “However, it won’t be a one-way move — corrections and higher volatility should be expected.”
