Gold breaks $4,800 as geopolitical tensions lift demand, analysts eye further gains

If tensions continue to escalate and the dollar remains weak, gold prices could soon hit the coveted $5,000 per ounce level, according to experts. 

On Wednesday, gold prices on COMEX hit a new record high of $4,890.35 per ounce, breaching the $4,800 mark for the first time ever. 

Safe-haven demand, fueled by increasing tension between the United States and NATO regarding Greenland, drove gold prices to a new record on Wednesday. 

Geopolitical tensions push gold to new heights

On Tuesday, Donald Trump reiterated his staunch desire to take control of Greenland, including the possibility of doing so by force.

The US President is scheduled to arrive at the World Economic Forum in Davos, Switzerland, on Wednesday.

He is expected to leverage the event to further his efforts to acquire the Arctic island, despite objections from European nations.

However, Danish Prime Minister Mette Frederiksen has stated her refusal to accede to Trump's demands and relinquish Greenland.

“This growth is a direct result of investors actively moving their money into safe-haven assets, which is honestly quite textbook behaviour for circumstances like the current ones,” Eugenia Mykuliak, founder & executive director of B2PRIME Group, a global financial services provider for institutional and professional clients, said in an emailed statement. 

Following White House threats concerning Greenland, the dollar index reached a two-week low, hovering there as a broad selloff impacted US assets, including the currency, Wall Street stocks, and Treasury bonds. 

Dollar weakness and Fed outlook

This depreciation in the dollar is significant because a weaker greenback makes metals priced in US dollars more affordable for international buyers.

“Investors dumped the US Dollar amid the uncertainty, potential retaliation, and an acceleration of the de-dollarization trend,” Haresh Menghani, editor at FXstreet, said in a report. 

Meanwhile, following Trump's statement last week that he would prefer to retain National Economic Council director Kevin Hassett, traders have reduced their expectations for two additional rate cuts by the US Federal Reserve in 2026.

“This, however, does little to provide any respite to the USD bulls amid the dominant 'Sell America' trade,” Menghani added. 

Market participants are currently anticipating the release of the US Personal Consumption Expenditure (PCE) Price Index, which is scheduled for Thursday.

The final US Q3 GDP growth report, along with key inflation data, is set to provide additional insights into the future direction of the Fed's policy. 

This outlook, in turn, will be a major determinant for both the dollar and gold, the non-yielding precious metal.

“Stronger global growth data would also play a role in such a cooldown,” Mykuliak said. 

The IMF's latest World Economic Outlook projects global GDP growth of approximately 3.3% in 2026. 

Should key economies continue to outperform expectations, a shift back to equities and other yield-generating assets by investors is increasingly likely, Mykuliak said.

Gold price outlook

“Looking ahead into 2026, the key factors affecting gold’s situation will be how the US tariff situation evolves,” Mykuliak said. 

The nearly 70% surge in gold prices experienced throughout 2025 suggests that this trend would be a logical continuation, according to Mykuliak. 

Conversely, a softening of the tariff discourse could reduce the appeal of safe-haven assets, consequently decelerating gold's upward movement, she added.

The recent surge in gold confirms a new bullish breakout, moving beyond the upper boundary of the month-to-date ascending channel, according to Menghani. 

Should strength continue past the $4,800 level, it will validate this positive outlook and support the continuation of the established uptrend, he added.

At the time of writing, the COMEX gold contract was at $4,865.56 per ounce, up 2.1%, while silver was at $94.570 an ounce.