Gold just had its best week since the pandemic panic of March 2020. And the rally might only be getting started.
The yellow metal blasted through $4,950 per ounce on Friday, hitting an intraday record of $4,966.93 and extending a surge that has seen prices climb more than 11% in January alone. For context, gold gained 64% in all of 2025—the best annual performance since 1979.
The current momentum makes that rally look like a warmup act.
Goldman Sachs threw fuel on the fire this week, raising its year-end gold forecast to $5,400 per ounce from $4,900. The bank’s commodities team, led by Daan Struyven and Lina Thomas, cited a critical shift: private investors who bought gold as a hedge against macro policy risks are refusing to sell. Unlike previous hedges tied to specific events like elections, these positions are “stickier” because the underlying concerns—fiscal sustainability, dollar credibility, geopolitical chaos—aren’t going away anytime soon.
“We see the risks to our upgraded gold price forecast as significantly skewed to the upside,” Goldman wrote in a note dated January 21. That’s Wall Street-speak for “this thing could run a lot further.”
What’s Driving the Surge
Three forces are converging to push gold into uncharted territory.
- The dollar is bleeding out. The has dropped 8.8% since the end of 2024, making gold cheaper for international buyers and undermining confidence in the world’s reserve currency. President Trump’s Greenland tariff threats—and the subsequent backtracking—highlighted just how quickly U.S. trade policy can swing. European leaders aren’t exactly breathing easy. Some analysts have raised the prospect of Europe “weaponizing” its substantial U.S. asset holdings, a scenario that would send gold even higher.
- Central banks can’t stop buying. Emerging market central banks have purchased a net 297 tonnes of gold through November 2025, according to the World Gold Council. Poland alone added 95 tonnes. Goldman expects central bank buying to average 60 tonnes per month in 2026 as countries continue diversifying reserves away from the dollar. For the first time in decades, the market value of gold held by foreign central banks has overtaken their holdings of U.S. Treasuries—close to $4 trillion.
- The Fed pivot trade is alive. Markets are pricing in two cuts in the second half of 2026. The released Thursday came in line with expectations, reinforcing the view that disinflation is progressing without forcing the Fed into emergency action. Lower rates reduce the opportunity cost of holding gold, which pays no yield. Western ETF holdings have increased by approximately 500 tons since the start of 2025, outpacing predictions based solely on rate-cut expectations.
Silver Is Running Even Hotter
If gold is surging, silver is absolutely screaming. The white metal jumped nearly 3% on Friday toward $99 per ounce, setting fresh all-time highs and closing in on the psychological $100 barrier.
Silver has gained more than 180% over the past year—nearly triple gold’s returns. Bank of America’s Michael Widmer has projected silver could reach between $135 and $309 per ounce in 2026.
That upper target might sound absurd until you consider the structural forces at play.
The Silver Institute reported a fifth consecutive year of structural market deficit, with demand exceeding supplies. The shortfall isn’t just about investment demand. Silver is critical for solar panels, AI data center components, and electric vehicle electronics. China’s tightening export controls have added another layer of supply pressure.
A historic short squeeze has also fueled the rally, with retail investors piling into a market far smaller and more volatile than gold. Silver’s nominal all-time high hit $96.60 on January 22. Adjusted for inflation, the 1980 peak of $49.45 would translate to roughly $200 per ounce today—suggesting silver may have considerable room left to run.
How to Play the Precious Metals Rally
For investors looking to capitalize on the move, several options exist across the risk spectrum.
- offers the most liquid direct exposure to gold prices. The ETF holds physical bullion and tracks the spot price closely, minus the 0.40% expense ratio. It’s the simplest way to own gold without dealing with storage or insurance hassles.
- provides similar exposure to silver. Given silver’s higher volatility and larger percentage moves, SLV offers more upside—and more risk—than gold ETFs.
- tracks major gold producers like Newmont, , and Agnico Eagle. The ETF has returned 153% over the past year, roughly double gold’s gains, demonstrating the leverage miners provide during bull markets. GDX hit a 52-week high of $106.09 this week.
- focuses on smaller exploration and development companies. Junior miners returned 177% in 2025, offering even more beta to gold prices. The trade-off is higher volatility and company-specific risk. When gold corrects, these names get hit hardest.
- Among individual stocks, stands out as the only gold producer in the S&P 500. The company posted record free cash flow of $1.6 billion last quarter and has completed a $4.3 billion divestiture program to focus on high-margin assets. Shares have climbed 172% over the past year and currently trade around $103.
- Barrick Mining (B)—which dropped “Gold” from its name to reflect its copper diversification—reported record quarterly free cash flow of $1.5 billion. The company has expanded its share buyback program to $1.5 billion, signaling management believes the stock remains undervalued.
The Risks Worth Watching
No rally lasts forever, and gold bulls should keep several risks on their radar.
- Stronger-than-expected economic growth could delay Fed rate cuts and strengthen the dollar, creating headwinds for precious metals. Thursday’s upward revision to Q3 GDP growth—to 4.4%—reminded markets that the U.S. economy remains resilient.
- A resolution to geopolitical tensions could reduce safe-haven demand. Trump’s apparent de-escalation on Greenland tariffs briefly knocked gold lower before it resumed its climb. Any lasting reduction in global uncertainty would likely cap upside.
- Technical exhaustion is a real concern after such a parabolic move. Gold has risen 70% in the past 12 months. Corrections during bull markets can be swift and painful, even if the secular trend remains intact. The last major pullback saw gold drop from $4,350 to below $4,000 in a matter of days.
- Institutional rebalancing creates periodic selling pressure. The Bloomberg Commodity Index recently reduced gold’s target allocation from 20.4% to 14.9%, forcing passive funds to sell an estimated 2.4 million troy ounces over a short period.
What to Watch Next
Three catalysts will determine whether gold continues marching toward Goldman’s $5,400 target.
First, the Federal Reserve’s January 28-29 meeting. Markets expect no rate change, but any hints about the timing of future cuts—or concerns about inflation—will move gold in either direction.
Second, Trump’s Fed chair nomination. The president has been interviewing candidates to replace Jerome Powell. A more dovish appointee would strengthen expectations for rate cuts and likely boost gold further.
Third, central bank buying data. If emerging markets accelerate their gold accumulation—particularly China and India—it would add another pillar of support to an already strong demand picture.
Gold at $5,000 no longer sounds crazy. The question now is what happens after it gets there.
