Last Updated on January 29, 2026 by Deon
Geopolitical “Boiling Points”
The key driver of gold’s vertical surge has been a succession of intense geopolitical shocks which have rocked investor confidence in traditional markets.
The Greenland Standoff: Decadeslong U.S.-Euro ties are breaking down in a dispute over the status of Greenland, with threats of 100% tariffs and a “vaporizing of trust” between allies.
Middle East Tensions: Recent Iranian military exercises in and around the Strait of Hormuz as well as a U.S. aircraft carrier strike group arriving in the region, have baked significant “war premium” into each ounce of gold right now.
Fed Independence and the ‘Powell Investigation’
In a bombshell for financial markets, headlines emerged about a federal probe of Federal Reserve Chair Jerome Powell.
The “Sell America” Trade: The inquiry, which is said to be tied to the Fed’s pushback against political attacks for more aggressive rate cuts, has cast doubt on the central bank’s autonomy.
Money Crisis: As the Fed’s credibility comes under fire and dollar hits 4-year low, international investors are moving out of U.S. Treasuries into gold as the ultimate neutral store of value.
Central Bank “Aggressive” Accumulation
Central banks are no longer just “adding” to their reserves; they are running away from the dollar at breakneck speed.
Record Buying: Led by the central banks of China, India and Poland, the official sector accumulated more than 1,100 tons over the last twelve months. Early in 2026, it became a new trend as countries try to “detach” themselves from the dollar-denominated financial order.
Diversification: As the dollar’s share of global reserves drifts down toward 55%, gold has once again taken its rightful place as the world’s ultimate reserve asset.
Trade bullydom and the “weak dollar” policy
U.S. administration has transitioned to a “Weak Dollar” policy in order to revive domestic production, math for global investors is changed at the most basic level.
Tariff Turbulence: Frequent threats of tariffs on Canada, Mexico and the European Union have upended supply chains, leaving “paper assets” feeling particularly risky.
Debased Currency: As the U.S. deals with skyrocketing debt and trade wars, gold has become a top hedge against the planned devaluation of the greenback.
What’s Next: Is $6,000 Now the Floor?
It has been a vertical rise, but some Wall Street institutions, like Bank of America and Goldman Sachs — have already jacked up their targets to spring 2026, or $6,000. In the age of “strategic sobriety,” gold isn’t a speculative play at all — it’s what the new economic reality is built on.
