Keep calm and believe in gold? Yellow metal hits USD 5,300 mark

Gold’s rally shows no signs of cooling off — the yellow metal surged past $5,300 per ounce on Wednesdy (January 28), marking an all-time high. The impact was felt in Indian metros such as Chennai, where prices shot beyond ₹5,200 per sovereign in just one day.

On January 22, Goldman Sachs revised its end-2026 forecast from $4,900 to $5,400 per ounce, citing strong demand from private investors and central banks diversifying their reserves. But, going by the current momentum, that $5,400 milestone may not have to wait until the end of 2026.

Also Read: Silver, gold hit record highs on MCX amid safe-haven buying

This morning alone, Chennai gold prices jumped ₹2,960 from yesterday's rate. By noon, another ₹2,240 was added, taking the total surge past ₹5,200 in a single day. As of now, one sovereign is priced at a steep ₹1,24,880. With global prices spiralling upward, another domestic price update may arrive sooner than traders expect.

What’s driving the gold rush?

The ongoing slide of the US dollar has investors racing for safer bets. Leading that charge is China, whose hunger for gold seems boundless. Officially, Beijing reported buying 0.9 tonnes of gold in December, lifting its total reserves to a record 2,306 tonnes — the 14th straight month of accumulation. But unofficial data paints a bigger picture: in November, estimates placed China’s real gold purchases at nearly 10 times the official figure.

Across 2025, China’s reported total stood at 27 tonnes, yet market analysts believe the actual number could exceed 270 tonnes, suggesting the official disclosures might reflect barely 10 per cent of the truth.

Also Read : Gold breaches Rs 1.5 lakh/10g-mark; silver soars to record Rs 3.23 lakh/kg

“Gold is climbing not merely out of market anxiety, but because confidence in the global monetary system itself is shifting,” noted Linh Tran, senior analyst at XS.com, speaking to Reuters.

The Trump factor

The US dollar remains weak — at a four-year low — but American President Donald Trump does not care much. He’s hinted that his pick for the next Federal Reserve Chair will be announced soon, adding that interest rates could fall further under new leadership.

With current Fed head Jerome Powell long resisting Trump’s push for lower rates, expectations are building around a potential Trump-aligned Fed succession. If that leads to a new wave of rate cuts, gold could have even more room to run.

Historically, gold and interest rates move in opposite directions. When rates fall, gold shines brighter. And if Trump truly wants to see rates dip toward the 1 per cent mark, the yellow metal’s record-breaking rally is just getting started.

The content above is for information, and does not constitute investment advice.