Gold Prices Hit Record $5,500 as Investment Demand Surges 84% in 2025

TLDR

• Gold futures hit a record high of $5,542.40 per ounce on January 29, 2026, up 27-28% since the start of the year
• Global gold demand reached an all-time high in 2025, with investment demand through ETFs, bars, and coins surging 84% to 2,175 tons
• Silver also reached an all-time high above $120 per ounce, rising approximately 60-67% in 2026
• The rally is driven by a weaker dollar, geopolitical tensions, and concerns about Federal Reserve independence and fiat currencies
• Trading volumes have decreased as banks limit precious metals positions due to balance sheet constraints and increased volatility

Gold prices surged past $5,500 per ounce on January 29, 2026, marking the ninth consecutive day of gains. The precious metal reached $5,542.40, jumping 4.5% in a single session.

The rally represents a 27-28% increase since the beginning of 2026. Gold only crossed the $5,000 threshold earlier in the same week.

Silver joined the rally with its own record high. The white metal climbed above $120 per ounce, rising roughly 60-67% since the start of the year.

The World Gold Council released data showing global gold demand hit an all-time high in 2025. Investment demand was the primary driver of this growth.

Investors purchased 2,175 tons of gold through exchange-traded funds, bars, and coins in 2025. This marked an 84% increase from the previous year.

Louise Street, a market analyst at the World Gold Council, said consumers and investors bought gold in response to economic and geopolitical risks. She noted these risks have become the new normal.

The surge is linked to what traders call the debasement trade. Investors are moving away from traditional assets like the U.S. dollar due to concerns about fiat currencies.

Fed Policy and Dollar Weakness Fuel Momentum

The Federal Reserve kept interest rates unchanged on January 28, as expected. Traders increased bets on future rate cuts, which typically benefit non-yielding assets like gold.

BlackRock’s Rick Rieder has emerged as a potential candidate to replace Jerome Powell as Fed chair. Rieder has advocated for more aggressive rate cuts.

The U.S. dollar fell to its weakest level in nearly four years. President Donald Trump stated he was not concerned about the dollar’s decline.

Treasury Secretary Scott Bessent later clarified the administration supports a stronger currency. He ruled out intervention to sell dollars against the yen.

Christopher Hamilton from Invesco said the rally reflects multiple forces rather than a single cause. He noted the speed of gold breaking milestones shows eroding confidence in traditional policy tools.

Market Conditions and Trading Dynamics

Trading volumes in precious metals have decreased as banks reduce risk exposure. Simon Biddle from Tullet Prebon said banks have limited balance sheets for precious metals trading.

Reduced liquidity has increased volatility in the market. Banks are taking fewer positions, constraining their ability to trade.

Geopolitical tensions continue to support safe-haven demand. The U.S. warned Iran about making a nuclear deal or facing military strikes.

The White House has threatened additional tariffs on South Korea and Canada. These actions have unsettled markets in recent weeks.

Hao Hong from Lotus Asset Management called gold and silver the ultimate safe-haven assets. He said gold serves as the anchor for all valuations.

CME Group raised margins on silver futures following the dramatic price surge. In China, where prices exceeded international benchmarks, a silver fund stopped accepting new investors.

Technical indicators show both metals may be overextended. Gold’s relative strength index rose above 90, while silver’s reached around 84.

Street from the World Gold Council expects momentum to continue in 2026. She cited ongoing economic and geopolitical instability as supporting factors for sustained demand.

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