Pedro Goncalves writes:
Gold prices extended gains at the start of the year after ending 2025 with a 64% rise, the strongest annual performance since 1979, as investors bet on further monetary easing by the US Federal Reserve.
Gold futures rose 1.2% to $4,392.70 an ounce, while spot prices climbed 1.5% to $4,384.93 at the time of writing.
“Precious metals are commencing 2026 in much the same fashion as they performed in 2025, which is to say with forward momentum,” said Tim Waterer, chief market analyst at KCM Trade.
Bullion surged last year, driven by interest rate cuts, expectations of additional easing by the Fed, ongoing geopolitical tensions, strong buying by central banks and rising holdings in exchange traded funds.
Markets are currently pricing in at least two US rate cuts this year, despite recent data showing resilience in the labour market. Assets that do not generate income typically benefit when interest rates are low.
“[Precious metals] seem to be making amends for the year-end selling, which afflicted them earlier in the week. Year-end position-squaring pressures have eased and gold is kicking off 2026 with gains, now that fundamentals are again in focus,” Waterer added.