Published: Tuesday, January 27, 2026 · 2:05 AM | Updated: Tuesday, January 27, 2026 · 2:05 AM
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(Bloomberg) — Gold rose, holding above $5,000 an ounce for a second day, as a weak dollar helped to extend a blistering rally fueled by geopolitical risks and investor flight from sovereign bonds and currencies.
Bullion jumped as much as 1.3% on Tuesday, its seventh straight day of gains. President Donald Trump threatened to hike tariffs on South Korean goods, and the dollar sank to the lowest in nearly four years on mounting speculation the US may help Japan to support the yen, making precious metals cheaper for most buyers. Silver climbed nearly 7%.
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Gold’s dramatic rally – the metal has more than doubled over the last two years – drives home bullion’s historic role as a gauge of fear in markets. Fresh from its best annual performance since 1979, it’s gained a further 17% so far this year due largely to the so-called debasement trade, whereby investors retreat from currencies and Treasuries. A massive selloff in the Japanese bond market is the latest example of investors rejecting heavy fiscal spending.
In recent weeks, the Trump administration’s actions — threats to annex Greenland and military intervention in Venezuela, as well as renewed attacks on the Federal Reserve’s independence — have also shaken markets. The US leader’s warning to South Korea follows a threat to Canada over the weekend to impose 100% tariffs if Ottawa makes a trade deal with China.
Gold’s appeal is showing up in speculator positioning data, and options traders are bracing for more upside in a red-hot market where few wish to stand against the wave. Implied volatility of Comex futures climbed to the highest since the peak of the Covid-19 pandemic in March 2020, while volatility on State Street’s SPDR Gold Shares — the world’s largest bullion-backed exchange-traded fund — has also broken out higher.
“Traders are buying pullbacks rather than fading rallies,” said Fawad Razaqzada, an analyst at City Index Ltd. “As long as that mindset persists, it is difficult to argue against higher prices in the near term, even if there is a short term disconnect between fundamentals and reality.”
Looking ahead, investors are awaiting Trump’s pick for the next Fed chair after the US president said he has finished interviewing candidates and reiterated he has someone in mind for the job. A more dovish chair would increase bets on further interest rate cuts this year — a positive for non-yielding bullion — after three successive reductions.
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