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Precious metals extend rally on rising geopolitical and trade risks AUGMONT BULLION REPORT
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Gold and silver climbed to fresh record highs, with gold touching $4,698 (~Rs.1,45,500) and silver reaching $94.36 (~Rs.3,01,300), as investors rushed into safe-haven assets amid a sharp escalation in geopolitical tensions. The move was triggered after U.S. President Donald Trump threatened to impose additional tariffs on European countries over control of Greenland.
The announcement drew swift criticism from European officials and raised fears of a wider transatlantic trade dispute. Trump warned that tariffs could rise to 25% by June if no agreement is reached. Combined with already elevated geopolitical risks, the rhetoric reignited global risk aversion, driving investors toward traditional safe havens like gold and silver. U.S. stock futures and the dollar weakened, while the yen and Swiss franc also benefited. European Union ambassadors have since agreed to step up diplomatic efforts to dissuade the U.S. from imposing tariffs, while preparing retaliatory measures if talks fail.
Geopolitical risks remain elevated elsewhere as well. Iran warned that any attack on Supreme Leader Ayatollah Ali Khamenei could trigger an all-out war with the U.S. Meanwhile, the Russia–Ukraine conflict continues to intensify, with Ukraine’s foreign minister citing evidence that Russia may be considering strikes near nuclear-linked infrastructure. President Volodymyr Zelensky said recent attacks suggest Moscow is not interested in diplomacy.
Silver has gained nearly 30% year-to-date, attracting strong speculative interest from both buyers and sellers, leading to sharp and erratic price swings. Physical tightness is showing early signs of easing as silver flows back from COMEX warehouses to Europe, while high prices may temper industrial demand. However, speculative appetite in China remains strong, with Shanghai prices trading almost $10 above London.
Markets now turn their attention to the U.S. PCE inflation data and the final Q3 GDP print for fresh direction. Even so, the broader fundamental backdrop continues to favor gold and silver bulls, keeping the case for further gains intact.
The gold boom began in mid-August, around $3400, and reached $4400 by mid-October. The prices then retraced and have been taking support from the uptrendline since. Gold is heading towards next resistance of $4750-60 (78.6% fibonnicci extension) (~Rs 147000) and $4990-5000 (100% fibonnicci extension) (~Rs 155,000).
As suggested last week, Silver has touched the 61.8% Fibonnicci resistance target of $93(~Rs 300,000). Next level to watch for is 78.6% Fibonnici extension of $99.2-100 (~Rs 320,000) and 100% fibonnicci extension of $107(~Rs 340,000). Strong support lies at $86.5 (~Rs 285,000).
A staggering 14% rally in January took gold above the US$5,000 mark, cementing the 5k number as a headline to match the first recorded annual 5,000 tonnes of total demand. The month closed at US$4,982/oz and scored 12 all-time highs. But it was not without drama with large intraday swings on the last two days of the month.
Our Gold Return Attribution Model (GRAM) showed an unusually large contribution from implied volatility (c.50% of January’s return), reflecting substantial option market activity. This variable currently sits in risk & uncertainty, although is likely more reflective here of momentum.Â
Global gold ETF flows provided plenty of support adding 120t in January to take holdings to a new record, valued at US$669bn. The flows were dominated by Asia (62t) and North America (43t) while Europe saw more modest inflows
Key Price Figures (January 2026)
The month was characterized by relentless momentum, scoring 12 all-time highs before ending with significant intraday volatility.
| Metric | Value (USD) | Peak Date |
| January Closing Price | US$4,982/oz | Jan 30, 2026 |
| All-Time Record High | US$5,307/oz | Jan 28, 2026 |
| Monthly Return | +14.1% | — |
Performance in Other Major Currencies (Jan Return):
- INR: +23.9% (Record high: ₹176,306/10g)
- RMB: +19.2% (Record high: ¥1,248/g)
- EUR: +13.0% (Record high: €4,444/oz)
Major Market Drivers
- Momentum & Options (GRAM Model): Approximately 50% of January’s return was attributed to implied volatility and massive options market activity rather than pure macro fundamentals.
- ETF Inflows: Global gold ETFs added 120 tonnes (valued at US$669bn), the strongest month on record.
- Asia: 62t (led by China)
- North America: 43t
- Europe: 13t
- The “Warsh Effect”: Late-month drama was fueled by the nomination of Kevin Warsh as the next Fed Chair. Markets perceive him as a “hawk” favoring a smaller Fed balance sheet, which triggered a sharp intraday correction from the $5,300 peaks.
Macro Outlook: The Inflation Resurgence
While geopolitics dominated January, the narrative is shifting toward resurgent US inflation risks for the remainder of 2026. Key triggers include:
- Tariff Pass-through: Lagged effects of trade policies hitting consumers.
- Fiscal Stimulus: Prospective $2,000 “tariff dividend” checks and ACA subsidies ahead of the US mid-term elections.
- Tight Labor: A falling breakeven employment rate and rising household inflation expectations.
Investment Implications
- Stock-Bond Correlation: Inflationary shocks are making stocks and bonds move in the same direction, reducing the efficacy of traditional 60/40 portfolios.
- Gold’s Role: Gold is increasingly viewed as a left-tail hedge and a “hard money” alternative as sovereign debt levels (reaching 30% of the $340T global sector debt) raise debasement fears.
The gold market is likely to “pause” after the January surge, but the combination of fiscal expansion and Fed leadership uncertainty suggests investment demand will remain a structural feature of 2026.
source :WGC
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