Gold and silver soared to record highs on Monday as a result of a flight to safety, triggered after US President Donald Trump threatened additional tariffs on certain European nations amid a disagreement regarding Greenland.
Analysts expect continuous upside in both precious metals as geopolitical tensions remain high.
“Gold crossed the December peak last week and evolved within a narrow range. It has now broken out of this consolidation with a gap, signaling a resurgence of upward momentum,” Société Générale’s FX analysts was quoted as saying in a FXstreet report.
Gold is likely to inch higher gradually towards the upper boundary of a steep ascending channel near $4765 and projections around $4850.
Geopolitical tensions spark rally
On Saturday, Trump escalated a dispute over Denmark’s massive Arctic island, Greenland, by threatening several European allies with a series of increasing tariffs unless the US is permitted to purchase it.
Trump’s recent threats of tariffs triggered a broad risk-averse shift across global markets, leading to a decline in stock markets and the dollar.
This uncertainty increased investor demand for traditional safe-haven assets, such as gold, the Japanese yen, and the Swiss franc.
Gold is generally a strong performer when there is geopolitical or economic uncertainty and when interest rates are low.
In 2025, it saw gains exceeding 64%, and its upward trend has continued this year.
At the time of writing, the COMEX gold contract was at $4,666.66 per ounce, up 1.6%.
The contract had hit a record high of $4,697.71 per ounce earlier in the day.
The silver contract on COMEX also hit a fresh record high of $94.350 per ounce earlier in the day.
It was at $93.118 per ounce, up 5.2% from the previous close.
Strong start to 2026
Despite being only two weeks into 2026, gold is experiencing one of its strongest starts to any year on record, rallying $256 this month for a 5.6% gain.
However, this still trails the beginning of last year, when gold prices climbed more than 7% in January.
Silver is experiencing its most significant new-year rally in history, with prices climbing by nearly $17.50 this month alone.
Over the past two weeks, the gray metal has surged by more than 24%.
This trajectory puts silver on course for its best monthly percentage gain since 1983, when it achieved a 26% increase in the year’s opening month.
Following significant gains in gold and silver this year, building on momentum from the latter half of 2025, analysts find it challenging to predict the immediate future.
However, they suggest a period of calm and stability would be beneficial for the metals, according to a Kitco report.
Monetary policy provides further tailwinds
Meanwhile, Federal Reserve Vice Chair for Supervision Michelle Bowman stated on Friday that the US central bank must be prepared to cut interest rates again if necessary, citing a fragile job market that could deteriorate rapidly.
Although markets anticipate the Fed will keep rates unchanged at its January 27-28 meeting, they are factoring in at least two 25 basis point rate cuts later this year.
The rise in precious metals prices is due to a combination of geopolitical crises in Iran, Venezuela, and Greenland, as well as concerns regarding the independence of the US Federal Reserve as well.
“If the situation eases somewhat here and there, prices could ease slightly again,” Barbara Lambrecht, commodity analyst at Commerzbank AG, said.
However, we generally consider the price level to be well supported.
“The gold price is likely to benefit from the fact that the Fed is expected to cut key interest rates more sharply than the market expects, and the silver price is likely to be helped by the fact that the market has been tight for years and that reducing the proportion of silver in industrial applications, known as “thrifting,” is difficult to implement,” Lambrecht added.
FXstreet analysts believe that gold prices have no signs of “trend exhaustion” amid expectations of rate cuts and simmering geopolitical tensions.
As long as geopolitical risks remain elevated and global uncertainty persists, gold is likely to retain its upward momentum.