LONDON, Jan 28, 2026, 23:50 GMT
- Gold surged past $5,400 again, defying the Federal Reserve’s decision to keep interest rates unchanged
- Commodities have rallied on a softer dollar, pushing oil higher and keeping sterling close to $1.38
- The rally is attracting new inflows, though its rapid pace heightens the risk of a correction
Gold surged past $5,400 an ounce late Wednesday, hitting a fresh high as investors continued snapping up the metal despite the Federal Reserve’s pause on interest rates. Spot gold, for immediate delivery, rose 0.3% to $5,415.52 by 2246 GMT, after peaking at $5,418.39. IG analyst Tony Sycamore highlighted ongoing central-bank purchases and “flight-to-quality demand” driving the rally. Reuters
The surge comes as markets juggle rate decisions and political moves. U.S. President Donald Trump announced he will soon name his choice to succeed Fed Chair Jerome Powell, whose term expires in May. Meanwhile, two Fed governors voiced opposition, backing a quarter-point (0.25 percentage point) rate cut. “The rally … has kind of taken on a life of its own,” said Peter Grant, senior metals strategist at Zaner Metals. Independent trader Tai Wong noted the complex is brushing off the Fed’s “hiatus mode.” Reuters
The dollar held steady after tumbling sharply the previous day, but CME’s FedWatch tool shows traders still don’t see better-than-even chances of a rate cut before June. “A steadier job market and sticky inflation made the Fed wait,” said Matthias Scheiber, head of the multi-asset team at Allspring Global Investments. Sterling slipped to around $1.38, while Brent crude closed at $68.40 a barrel. Reuters
Gold surged past $5,300 earlier, hitting that level for the first time as the dollar dropped to its lowest point in almost four years ahead of the Fed announcement, according to Yahoo Finance. Gold futures climbed 3.6% to $5,306.70 per troy ounce, the benchmark measure for precious metals. At the same time, spot gold prices were up 4.2%, trading around $5,277.25.
Longer-term flows are also fueling the metal’s surge. The Economist called gold a “debasement trade”—a wager that heavy borrowing and political turmoil erode trust in government bonds and currencies—and noted that global gold ETFs now hold over 4,000 tonnes of bullion. It highlighted fast growth in Asia-based gold ETFs and pointed out that Western institutional allocations remain low, suggesting potential for more demand if those portfolios shift. mint
Gold surged past $5,100, with silver hitting record levels, as traders reacted to Trump’s 100% tariff threat on Canada and worries over a U.S. government shutdown, boosting miners in London. The Guardian reported this on Monday. Tim Reid, UK Export Finance’s chief executive, told the paper, “There’s been significant news around tariffs and we can support business where they have potential impacts or concerns.” The Guardian
Silver hovered near $116.61 an ounce, not far off Monday’s record peak of $117.69. Meanwhile, platinum and palladium stayed close to their recent highs.
Physical demand remains strong. Crowds have packed gold shops in Shanghai and Hong Kong, with many betting prices will climb even higher.
The rally is gaining speed. Should the dollar strengthen or the Fed toughen its stance against bets on easier policy, bullion could face a steep drop after weeks of steady gains.
New buyers are entering the scene as well. Crypto firm Tether announced it intends to dedicate 10% to 15% of its investment portfolio to physical gold, signaling demand is creeping past the usual investor crowd.
Traders are focusing on Trump’s pick for the next Fed chair, potential new tariff actions, and shifts in Middle East tensions to gauge the dollar’s and gold’s next moves.
