Since the beginning of 2026, the international gold market has performed strongly. On January 12, the spot price of London gold hit a maximum of 4,601.38 US dollars per ounce, and COMEX gold futures reached an intraday high of 4,612.7 US dollars per ounce, both refreshing the historical highs set on December 29, 2025. During the same period, the Shanghai Gold Exchange's Shanghai Gold Main Contract exceeded 1,027 yuan/gram, and the jewelry quotations of mainstream domestic brand gold stores generally stood at 1,430 yuan/gram, a cumulative increase of nearly 8% from the end of 2025. This round of rise is not an isolated event, but the result of multiple factors such as monetary policy expectations, geopolitical risks, central bank gold purchasing behavior and changes in industrial demand.

Market trading activity increased simultaneously. On January 12, the Shanghai Gold Exchange issued another risk warning after half a month, emphasizing that "the recent fluctuations in precious metal prices have increased significantly" and requiring member units to strengthen risk management and investor education. On the same day, E Fund Gold ETF announced that it would suspend subscriptions starting from January 16, reflecting that the flow of funds into gold assets has accelerated significantly and market attention continues to rise.

Policy uncertainty disrupts US dollar credit system

As a non-interest-bearing asset, gold's pricing logic is highly correlated with the trend of the US dollar and real interest rates. Recently, the policy controversy surrounding the Federal Reserve has become the focus of the market. According to public reports, the U.S. Department of Justice has launched a criminal investigation into Federal Reserve Chairman Powell, and there are rumors that former President Trump plans to nominate a new Federal Reserve Chairman. Although such news has not been officially confirmed, it has triggered market concerns about the independence of the Federal Reserve. The U.S. dollar index has fallen under pressure, providing support for gold priced in U.S. dollars.

At the same time, market expectations for the Fed's interest rate cut path in 2026 have diverged. Some institutions have postponed the first interest rate cut from the first quarter to the middle of the year on the grounds that core inflation remains strong and policymakers may adopt a more prudent stance. Although there is a game in the pace of short-term interest rate cuts, most opinions believe that as economic data weakens at the margin, the general direction of starting an interest rate cut cycle throughout the year has not fundamentally changed, which is still conducive to reducing the opportunity cost of holding gold in the medium and long term.

Geographical conflicts broke out at multiple points, and demand for hedging was concentrated.

At the beginning of 2026, global geopolitical risks have increased significantly. The US military carried out military operations in Venezuela, the domestic situation in Iran was turbulent, the Russia-Ukraine conflict continued to stalemate, the Red Sea shipping safety issue remained unresolved, and multiple "black swan" events superimposed, boosting global risk aversion. Against this background, funds accelerated their flow to traditional safe-haven assets, and gold ETF holdings rebounded rapidly. Data shows that in the first two weeks of 2026, global gold ETFs have accumulated a cumulative increase of more than 280 tons, with the European and American regions accounting for the largest contribution.

What deserves more attention is that geopolitical tensions are further catalyzing the trend of “de-dollarization”. When the stability of the international order is challenged, some countries and institutions begin to reassess the long-term security of U.S. dollar assets and turn to increasing their gold holdings to diversify risks. This structural change has gradually evolved the role of gold from a short-term hedging tool to a strategic reserve asset.

Continue to build medium and long-term support

Global central banks continue to increase their holdings of gold, providing solid fundamental support for the market. Data from the World Gold Council shows that from January to November 2025, global central banks purchased a total of 297 tons of gold on a net basis, with emerging markets still being the main buyers. The People's Bank of China has increased its gold holdings for 14 consecutive months. As of the end of December 2025, official gold reserves reached 74.15 million ounces (approximately 2,306 tons). Uzbekistan, Kazakhstan, Poland and other countries also maintained a stable pace of gold purchases.

The core motivation for the central bank's gold purchase is to diversify foreign exchange reserves. In the context of high global debt levels and the continued expansion of U.S. debt, gold, as an asset without sovereign credit risk, has increasingly highlighted its strategic value. The Central Bank of Kazakhstan has publicly stated that its increase in gold holdings is aimed at "enhancing the economy's ability to withstand external shocks." Such statements reflect the great importance attached by emerging economies to asset security and also indicate that the central bank's gold purchase behavior may continue for a long time.

Industrial demand expands and supply and demand pattern tightens

This round of gold’s rise also presents new characteristics that are different from the past: industrial demand has become an important driving force. With the rapid development of high-end industries such as artificial intelligence, semiconductors and precision manufacturing, the application of gold in conductive, antioxidant and miniaturized components continues to expand, and the demand for industrial gold has increased significantly. At the same time, the growth rate of global gold mine supply is slowing down, with output increasing by only about 1.2% year-on-year in 2025. Constrained by declining ore grades and rising mining costs, the supply side is rigid.

It is worth noting that gold and technology stocks (such as the Nasdaq index) have recently experienced a rare simultaneous rise. In the past, gold was often used as a tool to hedge stock market risks; now, driven by the AI ​​industry chain, the precious metal sector has strengthened as a whole, and gold has benefited from the sector linkage effect. This change shows that its price-driven logic is evolving from a single hedging attribute to a dual-wheel support of "macro hedging + industrial demand".

Market enthusiasm is high, and volatility risks are rising simultaneously.

Although multiple positive factors have pushed gold prices higher, the market is already in a highly sensitive state. On the one hand, the positive factors have been fully reflected in the price; on the other hand, the influx of retail funds has accelerated, and trading sentiment has become more exciting. If there is a subsequent policy shift by the Federal Reserve, the geopolitical situation eases, or profit taking is concentrated, the market may undergo phased adjustments.

Regulators have been alert to this. In addition to the Shanghai Gold Exchange's risk warning, many fund companies have also imposed temporary restrictions on gold ETF subscriptions and redemptions to prevent liquidity risks. These measures reflect that during the rapid rise of the market, all parties are actively guiding participants to view short-term fluctuations rationally.

Conclusion

The current price of gold has exceeded historical highs, which is the result of the resonance of multiple forces such as monetary policy expectations, geopolitical risks, central bank behavior and industrial changes. This round of market prices not only reflects the market’s pricing of uncertainty, but also reflects the deep evolution of global asset allocation logic. In the future, the trend of gold prices will still depend on the dynamic balance of the above factors. For market participants, while paying attention to price changes, they also need to understand the changes in the driving mechanism behind them in order to more fully grasp the evolution of the role of this traditional asset in the new era.