Gold broke through to a new all-time high of $4,641 per ounce this week, as investors stampeded into safe-haven assets amid a confluence of uncertainties that has left even veteran traders reaching for superlatives. The precious metal has now gained more than 6% since the start of 2026, extending a rally that saw prices surge approximately 65% through all of 2025.

The move marks gold's first record high of the new year and comes as unprecedented developments in American monetary policy governance intersect with geopolitical flashpoints from Venezuela to the Middle East.

The Fed Factor

The most significant driver of gold's surge has been news that the Department of Justice has opened a criminal investigation into Federal Reserve Chairman Jerome Powell. The probe, unprecedented in the Fed's 110-year history, has raised fundamental questions about central bank independence.

"The investigation into Powell represents uncharted territory. Markets are struggling to price the risk of political interference in monetary policy—and when uncertainty is impossible to quantify, gold becomes the refuge of choice."

— Precious metals strategist at a major investment bank

Powell himself acknowledged the subpoenas during recent remarks, while 14 central bank heads from around the world issued an unprecedented statement of solidarity with the Federal Reserve. The global response underscores just how seriously the international financial community is taking the situation.

Geopolitical Pressures

While the Fed probe has dominated headlines, other factors have contributed to gold's safe-haven appeal:

  • Iran tensions: Despite recent signs of de-escalation, the risk of U.S. military action in the Middle East keeps investors on edge
  • Venezuela situation: American military activity in the region has added another geopolitical variable
  • Greenland tensions: Trump's continued interest in acquiring the territory has created diplomatic friction with Denmark
  • Trade policy uncertainty: Ongoing tariff disputes and the USMCA review process cloud the global trade outlook

The Path to $5,000

With gold now trading above $4,600, analysts are increasingly targeting the psychologically significant $5,000 level. HSBC said this week that trading momentum could carry prices to $5,000 in the first half of 2026, even as volatility remains elevated.

Ned Naylor-Leyland of Jupiter Asset Management went further, calling the $5,000 target "absolutely" achievable this year. The projection would represent an additional 8% gain from current levels—a modest move given the metal's recent trajectory.

Central Bank Buying

Supporting gold's advance is persistent buying from central banks around the world. Emerging market central banks in particular have been accumulating gold reserves, viewing the metal as a hedge against dollar-denominated risks and a way to diversify away from U.S. Treasury holdings.

China, India, and several Middle Eastern nations have been notable buyers, offsetting any selling pressure from investors taking profits on the rally.

Investment Considerations

For investors considering gold exposure, several factors merit attention:

Portfolio diversification: Gold's negative correlation with equities during stress periods makes it an effective portfolio diversifier. The current environment of elevated equity valuations may strengthen the case for allocation.

Inflation hedge: With tariff-related cost pressures beginning to filter through to consumers according to the Fed's Beige Book, gold's traditional role as an inflation hedge has gained renewed relevance.

Opportunity cost: With interest rates elevated, the opportunity cost of holding non-yielding gold is higher than during the zero-rate era. Investors should weigh the safety benefits against foregone interest income.

How to Access Gold

Investors have multiple avenues for gold exposure:

  • Physical gold: Coins and bars offer direct ownership but require storage and insurance
  • Gold ETFs: Funds like SPDR Gold Shares (GLD) provide liquid exposure without physical custody
  • Mining stocks: Gold miners offer leveraged exposure to metal prices plus potential dividends
  • Gold futures: For sophisticated investors, futures offer efficient price exposure with leverage

Risks to Watch

Despite the bullish momentum, gold investors should remain aware of potential headwinds. A sudden resolution to geopolitical tensions could reduce safe-haven demand, while a more hawkish Federal Reserve stance—should it somehow retain independence—could pressure prices through higher real yields.

For now, though, gold's record run reflects a global investment community that sees more risk than reward in complacency. As long as uncertainty persists around Fed independence and global flashpoints, the precious metal seems likely to remain well supported.