At the start of 2026, the gold market has delivered an unprecedented feast for investors. On 22 January, spot gold prices broke above the USD 4,900 per ounce barrier for the first time and continued to push into uncharted territory.

This rally has not only driven precious metals to record highs, but also reflects the market’s strong reaction to rising geopolitical uncertainty, a weakening US dollar and expectations for continued Federal Reserve easing. As a traditional safe-haven asset, gold has stood out in today’s complex global environment, becoming the focal point for risk-averse capital.

Geopolitical tensions have long been a powerful driver of gold prices, and the recent international dispute surrounding Greenland has pushed this factor to a new climax. US President Donald Trump announced that an agreement framework had been reached with NATO to secure full and permanent access for the United States to Greenland. While this has temporarily eased tensions in transatlantic relations, it has also exposed the need to upgrade security commitments in the Arctic to counter potential threats from Russia and others.

Trump’s stance has shifted dramatically—from initial tariff threats and hints at military action, to a sudden reversal that explicitly rules out the use of force. This U-turn has triggered sharp volatility across global markets. Although European allies breathed a short sigh of relief, EU leaders at an emergency summit in Brussels voiced concerns over US reliability, stressing the need to reduce dependence on Washington and reassess the broader transatlantic relationship.

This layer of uncertainty has directly fuelled a surge in risk-off sentiment. Greenland’s prime minister has reiterated that sovereignty is a red line that cannot be crossed, while the Danish prime minister has warned that the situation remains serious. Despite some progress, NATO still needs to move toward a standing deployment in the Arctic. Such remarks have heightened investor anxiety over global geopolitical risk, driving strong inflows into gold.

Beyond geopolitics, the continued softness of the US dollar has provided an additional pillar of support for gold. On Thursday, the US dollar index declined toward a three-week low, making dollar-denominated gold more attractive to overseas buyers. Following Trump’s reversal on Greenland, the safe-haven dollar edged lower, while risk-sensitive currencies such as the euro and the pound strengthened, underscoring the dollar’s relative weakness.

US economic data have been mixed: third-quarter GDP growth was revised up to an annualised 4.4% quarter-on-quarter, while initial jobless claims edged up to 200,000. Overall, however, the robustness of the data has convinced investors that the Fed’s accommodative stance will continue to underpin gold.

Market Commentary:

Looking ahead, the bullish structure in the gold market is likely to remain intact. Goldman Sachs has raised its gold price target to USD 5,400, based on the assumption that private sector holders will not dump their positions and that central banks will continue to accumulate gold. From the start of 2026, spot gold has already climbed nearly 15%, extending last year’s 64% surge.

However, if global monetary policy risks were to decline sharply and hedging positions were to be unwound en masse, a meaningful correction in gold cannot be ruled out.