Gold smashes $4,600 record as geopolitics drive flight to safety

Gold surged to a record high above $4,600 an ounce on Monday as investors rushed into safe-haven assets amid mounting political and geopolitical uncertainty, including concerns over U.S. monetary policy independence and escalating unrest in Iran.

Spot gold briefly blasted through $4,600 an ounce, extending a powerful rally that has defied expectations in an environment of rising real yields. The move underscores how political risk can overwhelm traditional valuation metrics when markets grow uneasy.

“Gold is reacting less to economics and more to uncertainty,” said Mark Ellison, chief metals strategist at Horizon Markets. “When investors start questioning the independence of the Federal Reserve and see tensions rising in the Middle East, gold becomes the default hedge.”

Demand intensified after the U.S. Justice Department opened a criminal investigation into Federal Reserve Chair Jerome Powell, raising fresh doubts about the Fed’s autonomy ahead of January’s Federal Open Market Committee meeting. Adding to the risk-off mood were reports of a potential U.S. strike on Iran amid violent protests in the country, as well as renewed threats by former President Donald Trump to seize Denmark’s Greenland.

Unrest in Iran has kept geopolitical risks elevated, reinforcing gold’s appeal. Middle East tensions typically support haven assets while weighing on broader risk sentiment, and the current episode has followed that pattern.

“Geopolitics is providing an extra layer of fuel for this rally,” said Lina Qassem, a senior commodities analyst at Altius Research. “Even investors who were skeptical of gold earlier this year are being forced to reassess.”

Oil markets, however, have remained relatively stable, suggesting traders do not yet anticipate major supply disruptions. Analysts cautioned that any deterioration in the situation could quickly alter that outlook.

From a technical perspective, gold bulls remain in control. The next key area of focus is around $4,660 an ounce, a break above which could open the door to $4,722, corresponding to the 161.8% Fibonacci extension of the latest decline, and potentially the $4,800 level.

Still, signs of near-term exhaustion are emerging. Momentum indicators such as the relative strength index and stochastic oscillator are hovering near overbought territory.

“Prices may need a clear and sustained close above the $4,550 to $4,600 zone to justify another leg higher,” Ellison said. “Otherwise, we could see a pullback.”

Failure to hold above that range could send gold lower toward support near the 20-day simple moving average around $4,400, with further downside potentially testing the 50-day average near $4,265.

Despite the risk of short-term consolidation, analysts said the broader trend remains intact as long as political and geopolitical uncertainty stays elevated.