Gold News: Price Breakout to Record High as Banks Target $6000 Ahead of Fed Decision

Gold Surges to Record High as Dollar Weakness Drives Demand

Spot gold futures hit another record high at $5,311.67 on Wednesday. Despite the runaway rally since the January 16 bottom at $4,536.49, the move has been orderly with gains averaging about $90 per day. Reuters is claiming “persistent economic and geopolitical uncertainty” is driving investors into the safe-haven metal, but I think this particular leg is being fueled by the weaker dollar since it tends to lead to greater buying by holders of foreign currencies.

At 14:14 GMT, XAUUSD is trading $5262.89, up $82.27 or +1.59%.

Multiple Factors Support the Precious Metal Rally

Prior to this current rally, the precious metal has been supported by a combination of factors like expectations of Fed rate cuts and “increased central bank purchases amid a global de-dollarization trend,” Reuters reported.

Since gold is dollar-denominated, any weakness in the greenback tends to be supportive, and since the dollar has dropped sharply since January 19, we have to conclude that it has been a major driving force behind the gold rally.

Trump’s Comments Amplify Dollar Decline and Gold Strength

Of particular interest for both dollar and gold traders were comments from President Trump on Tuesday. The dollar plunged yesterday after President Trump intensified investor concerns by commenting that the value of the dollar is “great” when asked about its recent plunge. Meanwhile, some traders are also blaming the greenback’s weakness and gold’s strength on Trump’s unpredictable economic policymaking and relentless pressure on Fed Chair Jerome Powell to lower interest rates even though the U.S. economy is relatively strong.

All Eyes on Powell’s Fed Decision and Press Conference

Powell is likely to get under Trump’s skin again this afternoon when the Fed announces its rate decision and the Chair holds a press conference shortly thereafter. Traders are hoping for some insight from Powell on the timing of the first rate cut, but most analysts believe he’s going to take a wait-and-see stand, meaning it all depends on what the labor market and inflation look like.

18% Gain in 2026 Appears Justified Amid Rate Cut Expectations

With investors pricing in at least two rate cuts this year, the 18% gain in gold so far in 2026 seems reasonable.

Major Banks Raise Price Targets to $6,000

With these bullish fundamental factors firmly in place, major investment houses are starting to raise their price outlooks because their 2026 forecast levels have already been exceeded. Deutsche Bank and Societe Generale are now looking for gold prices to reach $6,000 by the end of 2026.

Technical Outlook: New Trendline Supports Bull Run

Chart watchers are noting that gold is no longer closely following a trendline from the $4,274.02 bottom, but have picked up the trendline from the $4,536.49 bottom. Today, that trendline is at $5,008.05. That’s today’s key support although the current price is well above it.

More Information in our Economic Calendar.