Gold Smashes $5,000 Barrier: Safe Haven Demand Explodes on Geopolitical Fracture

Zero-yielding assets have defied traditional valuation models as Spot Gold (XAU/USD) tore through the psychological ceiling of $5,000 per ounce on Monday. The precious metal is capitalizing on a “perfect storm” of a weakening US Dollar, looming government shutdowns in Washington, and renewed trade war rhetoric.

The Drivers: Fear and Fiscal Dysfunction

The rally extends a five-day winning streak, with prices touching an intraday high of $5,092.94. Two primary engines are driving this historic move:

Central Banks Abandoning the Dollar?

Underpinning the retail and institutional buying frenzy is persistent demand from the official sector. Central banks in Poland, India, and Brazil continued their aggressive gold accumulation into early 2026, signaling a structural shift away from US Treasury reserves.

“The demand is physical and relentless,” noted analysts watching the ETF space, where holdings surged to over 4,025 tons in 2025.

Technical Outlook

While the fundamental backdrop is overwhelmingly bullish, technical indicators suggest caution in the short term. The Relative Strength Index (RSI) on the 4-hour chart has pushed above 80, a level indicating extreme overbought conditions.

• Resistance: The immediate ceiling is the channel top near $5,100.
• Support: A pullback would likely find buyers near $4,932.

Traders are now eyeing the upcoming Federal Reserve interest rate decision, where any dovish signals for the remainder of 2026 could fuel the next leg up for the metal.