Gold prices reached a new record on Monday, trading above 4,400 dollars an ounce for the first time, as investors responded to expectations of further US interest rate cuts and ongoing geopolitical and trade tensions. Analysts said demand for safe-haven assets has continued to build throughout the year, pushing gold to its strongest annual performance in decades.
Interest Rate Expectations And Investor Demand
Analysts said the latest surge reflects growing expectations that the US Federal Reserve will cut interest rates further next year. Lower interest rates typically reduce returns on assets such as bonds, leading investors to seek alternatives like gold and other commodities.
The current consensus among analysts is that the US will lower interest rates twice in 2026. Gold began the year trading at around 2,600 dollars an ounce and has since climbed more than 68 percent, according to Adrian Ash, director of research at BullionVault. Ash said this marks the largest annual increase since 1979.
Geopolitical And Trade Pressures
Ash said the rise in gold prices has been driven by what he described as slow-developing trends linked to interest rates, war, and trade tensions throughout 2025. He attributed much of the recent momentum to policies associated with President Donald Trump, including trade tariffs, criticism of the US Federal Reserve, and wider geopolitical pressures.
Gold is often viewed as a hedge during periods of economic uncertainty, inflation risk, and political instability, factors that analysts said have remained prominent throughout the year.
Central Bank Buying And Dollar Weakness
Another source of demand has been increased buying by central banks. According to analysis from Goldman Sachs, central banks worldwide are expanding their physical gold reserves to reduce reliance on the US dollar, counter economic volatility, and diversify portfolios. Goldman Sachs said it expects this trend to continue into 2026.
A weaker US dollar has also supported gold prices by making the metal cheaper for overseas buyers, further boosting demand.
Performance Of Other Precious Metals
Other precious metals have also posted strong gains. Silver reached a record high of 69.44 dollars an ounce on Monday. Year to date, silver is up 138 percent, while platinum has reached a 17-year high.
Analysts said silver and platinum have outperformed gold in 2025, supported by supply constraints and strong demand. Unlike gold, these metals are widely used in industrial manufacturing, which has added to buying pressure.
Oil Prices And Broader Commodity Moves
Separately, oil prices rose on Monday following a US order last week to block sanctioned oil tankers from entering and leaving the country. Brent crude increased by 53 cents to 60.99 dollars a barrel, while US oil rose 1.6 percent to 57.40 dollars.
Despite the recent gains, analysts said both benchmarks are on track to end 2025 below their levels at the start of the year.
Featured image credits: Pickpik
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