Gold prices just reached a record high. Here's what's behind the surge.
Gold prices soared above $4,400 on Monday to reach a new all-time high, as analysts pointed to rising geopolitical tensions and softer monetary policy as key drivers of the surge.
The price of the precious metal traded at $4,475 per ounce at 4 p.m. EDT after hitting a high of $4,477 per ounce earlier in the day. The asset has risen more than 70% since the start of this year. Gold is viewed as a safe-haven investment and typically acts as a hedge against inflation.
"The metals trade has been strong all year, and particularly for gold," Bret Kenwell, a U.S. investment and options analyst at eToro, told CBS News. "As its fundamentals remain intact, gold digested its recent rally to all-time highs quite well."
Silver prices were also rallying on Monday, reaching $69 by 4 p.m. EDT. The metal is up 130% since the start of the year.
Both gold and silver are on pace to reach all-time closing highs today, according to analysts. The rally comes amid expectations for a strong finish in the stock market, where tech gains have helped boost performance.
What's driving the surge in gold prices?
Investors are moving money into gold due to a swirl of geopolitical factors, analysts note.
Bond yields around the world floated higher at the same time major global currencies like the yen weakened, Alex Kuptsikevich, the chief market analyst at online brokerage platform FxPro, said in a statement. The combination is reviving interest in the so-called "debasement trade" — a strategy of moving money out of fiat currencies in favor of hard assets like gold, he noted.
Other geopolitical risks, including the U.S. blockade of oil supplies from Venezuela and Ukraine's attack on a Russian shadow fleet tanker in the Mediterranean, were also pushing investors toward gold on Monday, Kuptsikevich added.
Softer monetary policy may also be driving the upswing in gold prices this year, with investors more bullish after three consecutive rate cuts from the Federal Reserve. Many on Wall Street expect the central bank to continue to ease monetary policy in 2026, while President Trump is set to nominate a new central bank chief before Fed chair Jerome Powell's term ends in May.
"The latest leg of the rally has been driven by the market pricing in an increasingly gold-friendly 2026 outlook, with lower rates and a potentially softer dollar acting as tailwinds for the bullion," said Trevor Yates, senior investment analyst at Global X ETFs, a New York-based investment company.
Central banks in multiple countries are also buying more gold, Yates added, helping drive up the asset's price.
Demand for the precious metal from monetary authorities like the National Bank of Poland has risen in recent months, according to the World Gold Council, a trade association for the gold industry. Central bank gold purchases through October totaled 254 tonnes, a slower pace than the previous three years, the World Gold Council said earlier this month.
Yates said central bank holdings are still far below their historical levels.
What's the forecast for gold in 2026?
Despite investor exuberance this year, the gold rally may not continue its run in 2026, according to Capital Economics. The investment advisor firm predicted in a Monday research note that the price of the precious metal could fall to $3,500 by the end of next year — and that the drop will act as a drag on silver prices.
"So goes gold, so goes silver: the end of the speculative boom in the former will also kill off the rally in the latter," Capital Economics said in the research note.
Other analysts hold a more optimistic outlook. Yates said he expects lower interest rates and a potentially weak U.S. dollar to help boost the case for hard assets like silver into next year.
"Overall, we continue to believe we are in the early innings of a broader precious metals rally and remain constructive on both gold and silver," he said.