Gold rises today amid rising geopolitical risks
Gold prices recorded a strong rise in the first trading session of 2026, as the yellow metal rose by more than 1.5% during Friday's trading, currently trading near $4,380 per ounce, signaling a strong start to the new year after an exceptional performance in 2025.
This performance is an extension of a long-term bullish trajectory, with gold achieving its strongest annual performance in more than four decades, driven by rising geopolitical risks and expectations of accommodative monetary policy.
Geopolitical tensions support safe-haven demand for gold
The strong rally in gold prices was supported by escalating tensions between Saudi Arabia and the UAE this week, as the kingdom warned its Gulf rival not to jeopardize its security and said it would take all necessary measures to counter the threat.
These developments have contributed to increased demand for gold as a safe haven, especially as geopolitical risks in the Middle East escalate, reinforcing the precious metal's appeal in times of uncertainty.
Gold's strong gains in 2025 set the stage for further upside
Gold has posted impressive annualized gains of around 65% in 2025, with the rally accelerating since late April, after the US administration imposed sweeping global tariffs, adding to concerns about slowing global economic growth.
The rally has been supported by a number of key factors, including:
- Continued geopolitical uncertainty
- Expectations of a U.S. interest rate cut
- Central banks continue to buy gold
- Renewed inflows into gold-backed exchange traded funds (ETFs)
The Federal Reserve and monetary policy: A further supportive factor
The minutes of the Federal Reserve's December meeting, published recently, showed an increasing openness among policymakers to ease monetary policy if inflation continues to fall.
While officials continue to disagree on the timing and magnitude of a rate cut, markets see these signals as further support for gold prices in 2026, given the inverse relationship between gold and interest rates.
Other global tensions boost gold's appeal
Besides the Middle East, global geopolitical tensions remain a major factor in gold's movements:
- The U.S. has stepped up its efforts against Venezuela's oil trade.
- Renewed Russian-Ukrainian strikes over the Christmas period targeted Black Sea ports and energy infrastructure.
These developments add to global uncertainty, boosting demand for safe-haven assets, especially gold.
Gold Price Forecast for 2026
In light of current data, gold prices in 2026 are expected to remain supported by several key factors, most notably:
- Continued geopolitical tensions
- U.S. monetary policy moves toward easing
- Strong investment and official demand
- Potential for continued weakness in the U.S. dollar
However, prices could see short-term corrections if risks ease or a rate cut is postponed, without affecting the long-term uptrend.
