Gold heads toward $5,000 per ounce: Will the upward trend continue amid geopolitical challenges?

Gold prices continued their strong gains during Wednesday's trading, rising for the third consecutive day amid escalating global geopolitical risks and a decline in the US dollar, which reinforced investors' shift toward safe assets and risk aversion.

This month marks the sixth consecutive month of continuous gains for gold.

Gold prices today

Gold prices rose by more than 2.5% during today's session to set a new record high of around $4,888 per ounce, coming close to the important psychological barrier of $5,000 per ounce, amid expectations of continued gains in the coming period.

The main factors behind the current rise in gold are:

• Escalating geopolitical risks: International tensions directly affect the movements of gold as a traditional safe haven.
• Weak US dollar: The decline of the US currency contributes to the appeal of gold as a store of value.
• Investor hedging: Uncertainty is prompting investors to avoid risk and move towards safe assets.
• Positive technical signals supporting the upward trend.

Geopolitical tensions push gold higher

Investors attribute the recent gains in gold prices to heightened geopolitical volatility, particularly with renewed US threats to impose new tariffs, which have destabilized European markets and cast a shadow over global trade, raising risk premiums in equity markets.

During the World Economic Forum in Davos yesterday, US President Donald Trump confirmed his commitment to his plan to acquire Greenland, in a move that has heightened political tensions between the US and Europe.

Greenland at the heart of tensions

In response, Greenland's prime minister called on citizens to prepare for the possibility of military action, although he described this scenario as unlikely, adding further concern to financial markets.

These developments follow Trump's threat to impose an additional 10% tariff on imports from several European countries starting February 1, with the possibility of raising it to 25% by June if no agreement is reached on Greenland.

Stock decline boosts demand for gold

The escalating tensions coincided with a decline in major global markets, which boosted investors' shift toward gold as a safe haven.

Analysts point out that these moves reflect not only temporary concerns, but also a deeper repositioning in global asset allocation in favor of precious metals.

Technical factors support a target of $5,000

With positive technical signals continuing, analysts believe that the $5,000 per ounce level is no longer a distant scenario, but a realistic and achievable target if the current price-supportive conditions continue.

US inflation data awaited

On the other hand, investors are awaiting the release of the delayed US personal consumption expenditure inflation report later this week, which may provide clearer signals about the Federal Reserve's stance on interest rates and the resulting direct impact on gold movements.

Ultimately, amid growing geopolitical uncertainty, a weakening dollar, and continued pressure on stock markets, the outlook remains supportive of further rises in gold prices, with markets awaiting any political or economic developments that could reshape the trend in the coming period.

As always, we recommend buying gold only during these periods, especially with any corrective downward decline, to minimize risk.