By Christopher Tahir – Senior Market Strategist at Exness
Gold rose on Monday and traded close to record highs, extending its strong upward momentum as markets reacted to US monetary policy expectations and geopolitical risks. The metal benefited from expectations of additional interest rate cuts in 2026 following the Federal Reserve’s recent rate reduction and a less hawkish tone than expected from Fed Chair Jerome Powell.
At the same time, steady inflows into gold-backed ETFs and continued accumulation by central banks could continue to provide support to the market. ETF inflows stabilized during the last few weeks after a short period of outflows.
Beyond that, concerns over the independence of the Federal Reserve could also drive investors toward safe-haven assets. With the Fed’s leadership to change during 2026, markets could remain attentive to any political interference in monetary policy.
On another front, peace prospects in Eastern Europe remain elusive amid persistent tensions in the region. Similarly, the Middle East continued to face tensions. In Asia, risks of an escalation remain present, as well as in Latin America, potentially driving demand for gold and other similar assets.