On the evening of February 20th, international gold prices surged by over 2%, reclaiming the $5,100 per ounce level. The immediate catalyst for this rally was the U.S. Supreme Court's rejection of former President Trump's tariff policies, coupled with his public statement that he is "considering limited strikes against Iran," which heightened global risk aversion among investors.
Industry experts indicate that the fundamental drivers supporting higher gold prices remain intact. The ongoing challenge to the U.S. dollar's credibility continues to reinforce gold's role as a safe-haven "hard asset." Investors are advised to focus on long-term trends while remaining cautious of potential volatility at elevated price levels.
Frequent geopolitical tensions are amplifying gold's appeal, yet the core rationale for its ascent remains unchanged. Although the Supreme Court's ruling nullified certain tariffs, Trump promptly announced plans to impose new 10% tariffs on global goods using alternative legal grounds. Market participants view this new trade policy uncertainty as fueling demand for safe-haven assets.
A chief metals analyst at a securities firm noted that the foundational logic for gold's strength is persistent—specifically, the erosion of confidence in the U.S. dollar. Any emergence of risk events further catalyzes gold's function as a reliable store of value.
Since 2026, global geopolitical conflicts have multiplied: U.S. military involvement in Venezuela, Trump's investigations into the Federal Reserve Chair, sovereignty claims over Greenland, and potential military action against Iran. A senior executive at a multi-billion-dollar private fund recently emphasized continued optimism for gold and precious metals, citing underlying "monetary phenomena" such as high fiscal deficits in the U.S. and Europe, persistent money printing by major central banks, and ongoing geopolitical strains—all driving global demand for inflation hedging and capital preservation.
Hong Kong gold investment specialist Luo Zhenyu added that since last year, deep-seated concerns about transformations in the global monetary system have sustained investor interest in gold.
Short-term consolidation is expected, but the long-term bull trend persists. Zhu Zhigang, Vice President and Chief Gold Analyst of the Guangdong Gold Association, suggested that over the long run, given the decline in dollar credibility and unabated geopolitical tensions, a sharp drop in gold prices is unlikely. However, after significant gains, prices may experience heightened volatility.
Luo Zhenyu projected that gold may fluctuate around $5,000 per ounce for at least the next six months, with a subsequent target of $10,000 per ounce following a period of consolidation.
The aforementioned securities analyst expects gold prices to continue their upward trajectory, though volatility may arise around the appointment of the next Fed Chair. Current candidates present a market dilemma—potentially pursuing balance sheet reduction alongside interest rate cuts—with the sequence of these actions likely to significantly influence gold prices.
A representative from China Molybdenum Co., Ltd. recently expressed long-term optimism for gold prices and the value of gold assets, citing geopolitical instability and expectations of further Fed rate cuts. Gold is viewed as a "certain" metal category in today's market.
Regarding investment strategy, the private fund executive recommended increasing allocations to gold as a non-credit asset, citing global de-dollarization trends, recurring geopolitical conflicts, and ongoing central bank purchases. Gold's role as a safe-haven asset remains compelling, especially given that high-net-worth individuals and institutions are currently under-allocated to gold. It remains suitable as a component of a diversified investment portfolio.
Luo Zhenyu advises investors to base decisions on long-term trends rather than attempting to time short-term fluctuations.
Zhu Zhigang suggested that the upward trend in gold prices is likely to continue for roughly the next five years, with price dips representing buying opportunities. For long-term allocation, he recommends a holding proportion of 5% to 10% of household assets.
As the largest buyers of gold, central banks worldwide have been consistently adding to reserves to bolster monetary credibility amid a weakening dollar. According to central bank data, China's gold reserves reached 74.19 million ounces by the end of January 2026, marking the fifteenth consecutive monthly increase. Meanwhile, the World Gold Council reported that global gold demand hit a record 5,002 tonnes in 2025, surpassing the 5,000-tonne mark for the first time.
Comments