By Mike Dolan
Jan 26 –
What matters in U.S. and global markets today
By Mike Dolan, Editor-At-Large, Finance and Markets
Gold seemed unstoppable on Monday as it topped $5,000 per ounce for the first time ever, vaulting more than 80% over the past 12 months.
What’s the trigger for the latest surge? Take your pick from the potential drivers: a falling dollar, a fracturing world order, renewed trade tensions, worries about Fed independence, and a higher inflation horizon.
Central bank buying and retail speculation also continue to boom. So, looking forward, gold and precious metals – with silver at new records too – appear likely to remain the haven and hedge of choice.
I’ll get into all that and more below.
But first, check out my latest column on why this week’s Fed policy meeting could mark a key flashpoint in the escalating battle for central bank independence.
And listen to the latest episode of the Morning Bid daily podcast. Subscribe to hear Reuters journalists discuss the biggest news in markets and finance seven days a week.
GOLD-PLATED FEAR
The latest spike in the gold price comes after a torrid week of geopolitics surrounding Greenland, capped by President Trump’s abrupt U-turn on military and trade threats against the Arctic island and its European backers, respectively.
While the about-face has lowered tensions, it was a hollow victory for Trump’s NATO allies, some of whom fear lasting damage to the alliance in light of the president’s erratic, centralized foreign policy decision-making.
And the spectre of trade tensions still looms large as tariff threats against other allies remain live. Trump lashed out at Canada again on Saturday, threatening 100% tariffs over Prime Minister Mark Carney’s pending trade agreement with China.
Meantime, the dollar plunged to two-month lows against the yen amid speculation about joint U.S.-Japan action to prop up Japan’s currency. This followed reports on Friday that the New York Fed had checked dollar/yen rates with dealers – considered a precursor to intervention. Any U.S. involvement would reinforce the belief that Washington wants a weaker dollar generally.
At home, the fatal shooting of another anti-ICE protester in Minneapolis has further raised U.S. political tensions in what is a crucial election year for the Trump administration. What’s more, the furore could risk a partial government shutdown later this week. Chuck Schumer, the Senate’s top Democrat, said on Saturday night his party would vote against funding legislation that includes money for the Department of Homeland Security.
And the impacts of Winter Storm Fern, which has ravaged much of North America, continued to be felt in the energy markets on Monday as oil prices edged higher thanks to output disruptions. This came after a more than 2% rise in the previous session.
Aside from a weaker dollar, this morning has also seen steady U.S. stocks and a slip in Treasury yields ahead of Wednesday’s Fed meeting – where policy is expected to remain unchanged – and the release of a raft of earnings this week from the likes of Apple, Microsoft, Tesla, and others.
Chart of the day
Gold surged to a record high above $5,100 an ounce on Monday, marking a more than 18% increase this year. That’s following a 64% spike in 2025, its biggest annual gain since 1979. The dramatic rise has been driven by safe-haven demand, U.S. monetary policy easing, robust central bank purchases, and record inflows into exchange-traded funds.
Meanwhile, silver climbed above the $100 mark for the first time on Friday, building on its 147% rise last year as retail-investor flows and momentum-driven buying compounded a prolonged spell of tightness in physical markets for the metal.
Today’s events to watch
* U.S. manufacturers’ new orders for November (8:30 AM EST), Dallas Fed business survey for January (10:30 AM EST)
* U.S. corporate earnings: Alexandria Real Estate Equities, Brown & Brown, Nucor, Steel Dynamics, W. R. Berkley
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(By Mike Dolan)
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