News

Key takeaways

• Gold’s relentless advance has entered uncharted territory after Asia saw the spot price break decisively above USD 4,000 per ounce for the first time
• The move above USD 4,000 is not simply a function of rate expectations or a weaker dollar. Rather, it reflects a deeper shift in investor psychology and global capital flows
• Year-to-date gains now stand near 52%, while silver and platinum have rallied 64% and 86%, respectively. Palladium, though less in focus, has added nearly 50%. 

The China effect: one-way flow

China’s role has been pivotal. With property prices falling for the first time in a generation, Chinese households have sought alternative assets. Gold has become a preferred vehicle, reinforced by state media campaigns promoting its role as a safe investment. The dynamic is amplified by the structure of China’s gold market: once gold is imported, it cannot be re-exported. The result is a one-way flow—an absorption of global supply that tightens international markets and limits downside pressure.

Tomorrow’s reopening of the Shanghai Futures Exchange after the Golden Week holiday will provide the next test of sentiment. Futures there are set to open roughly six percent higher, a move that could inject fresh momentum into global trading. The degree to which Chinese investors chase prices higher will help determine whether this rally can sustain its current pace or needs a near-term pause.

Fed independence and fiscal unease

Beyond the flows, politics has become a key tailwind. Concerns about the Federal Reserve’s independence ahead of the 2026 U.S. midterm elections, coupled with a prolonged government shutdown and widening fiscal deficits, have left investors questioning Washington’s ability to manage its balance sheet. The U.S. now spends more on interest payments than on defense—a statistic that underpins the appeal of holding assets that carry no counterparty risk.

Gold’s rally has thus become a mirror of waning confidence in the old financial order. For decades, investors treated U.S. Treasuries as the global risk-free benchmark. Today, the market’s message is subtler: “risk-free” and “trust-free” are no longer synonymous.

Overbought on the charts, under-owned in portfolios

From a technical standpoint, gold is stretched. The monthly relative strength index (RSI) is above 90 for the first time since the 1980s, suggesting short-term overheating. Resistance is expected in the USD 4,100–4,150 range, where some profit-taking may emerge. Yet structurally, gold remains under-owned. In major institutional portfolios, allocations to bullion still hover near multi-decade lows relative to equities and bonds.

That imbalance leaves scope for further inflows, particularly if central banks or large asset managers view recent volatility in bonds and currencies as a sign of systemic fragility. In that sense, a tactical correction of USD 200–300 would be healthy—a chance for new capital to enter rather than a signal that the rally is over.

Silver, platinum, and the catch-up trade

While gold grabs the headlines, the other precious metals have quietly built momentum. Silver, often described as gold on steroids, has lagged slightly but remains up 64% year-to-date. Traders are now eyeing the 2011 record near USD 50 per ounce as the next major target. Platinum’s 86% gain this year reflects both tightening supply and its appeal as a lower-cost alternative to gold. The gold–platinum ratio has fallen sharply from 3.5 in April to 2.44 currently but with the 5-year average near 2.15, suggesting more room for normalization if investor rotation continues.

Palladium, long the underperformer after years of overinvestment in automotive catalysts, has shown signs of stabilizing. Its 7.8% gain this past week was the strongest within the complex, though it remains well below its 2021 peaks.

Outlook: momentum meets paradigm shift

The path ahead will likely blend tactical volatility with structural strength. A consolidation phase near USD 3,800–3,900 would relieve overbought conditions without altering the longer-term uptrend. Key to sustaining momentum will be continued central-bank buying, stability in Chinese imports, and steady ETF inflows.

Beyond near-term price action, the more profound question is whether gold’s rise marks a lasting reordering of the financial landscape. If investors increasingly see political and financial systems as intertwined—and potentially vulnerable—the argument for holding unencumbered tangible assets strengthens.

Gold’s surge through USD 4,000 may therefore symbolize more than another cyclical rally. It may represent a collective reappraisal of trust, sovereignty, and what it truly means to be “safe.” In that sense, the market is not just questioning the old order—it may already be pricing in the next one.