The gold price rally had earlier driven prices to record highs just below $5,600 on January 29 before a sharp sell-off pushed gold down to $4,403 an ounce on Monday. The drop, along with profit booking, followed US President Donald Trump’s nomination of Kevin Warsh as the next chair of the Federal Reserve.
Market experts believe the underlying forces supporting gold, including geopolitical tensions, strong central bank demand, questions around the Federal Reserve’s independence, rising US debt levels, trade-related uncertainty and de-dollarisation trends, are likely to remain intact through 2026.
“Gold’s thematic drivers remain positive and we believe investors’ rationale for gold (and precious) allocations will not have changed,” analysts at Deutsche Bank said.