Gold posts best monthly performance since September 1999

ISTANBUL

Gold surged 13.2% per ounce in January, seeing its best monthly performance since September 1999 amid global geopolitical risks.

The US insists on purchasing Greenland, which resulted in some tensions with Europe, while the lack of a significant change in the policy expectations of the Fed, and the associated expectations that the US dollar may lose value pushed up gold prices.

Concerns over a partial federal government shutdown in the US and the rising Chinese demand contributed to the rise.

Gold’s record streak from last year continued into January this year.

Gold started 2026 at $4,313 per ounce and rose to a record high of $5,598 in January.

The ounce price of gold ended December 2025 at $4,882.1.

Many factors played into the record price, as the weakening of the US dollar and the investors’ shift away from government bonds and currencies were key.

Concerns over global trade, heavy fiscal spending, and speculations that the US may intervene to support the Japanese yen put more pressure on the US dollar and made precious metals cheaper for most buyers.

Precious metals rose significantly last year due to rising geopolitical tensions and concerns over the Fed’s independence.

Gold and other safe-haven assets soared after the US attack on Venezuela, and a possible US military intervention in Iran led to record highs.

The Fed kept its policy rate unchanged at 3.5–3.75% in January, within estimates, and Fed Chair Jerome Powell’s statements reflecting a risky view of the US’ current debt led the US dollar demand to decline.

The US warned Iran, requesting to either make a nuclear deal or face military response, while threatening South Korea and Canada with additional tariffs.

Gold has been overbought and may be subject to correction, while strong buying interest on dips supports the upward trend.

The selling pressure in the Japanese bond market also contributed to gold prices, as rising bond yields pushed up borrowing costs and made carry trade transactions less attractive, prompting investors to turn to safe-haven assets.

Investor shift from bonds and currencies influence prices

Ole Hansen, head of commodity strategy at Saxo Capital, told Anadolu that investors have shifted away from government bonds and currencies to protect against the risk of currency depreciation, while the further weakening of the US dollar contributed to the trend.

Concerns over federal government shutdown and speculations over more Fed pressure on the US dollar led to the changes, while industrial silver demand started to decline and the investor demand concentrated on tangible assets.

Hansen stated that the uncontrolled fiscal debt continues to weaken confidence in fiat currencies, and the US’ privileged position weakened with its currency losing value and capital shifting elsewhere.

The unpredictable US political environment further exacerbated the global uncertainty, while sticky inflation concerns contributed to the shift.

Hansen noted that the global equity performance showed a gradual reallocation away from US assets, while emerging markets outperformed developed markets since the beginning of 2026, and the gold played a hedge role against systemic risk, attracting already protection seeking investors.

Hamad Hussain, climate and commodities economist at Capital Economics, told Anadolu that various factors played into gold to push record prices.

Hussain stated that the US dollar fell to its lowest in four years and rising geopolitical risks, especially related to US threats against Greenland and Iran, increased the demand for gold as a safe haven.

He added that the policy uncertainty in the US contributed to the rise in demand, which led gold to rise, noting that the upward trend may continue in the near future.

*Writing by Emir Yildirim