Gold’s Meteoric Rise: Geopolitical Tensions and Rate Cut Hopes Fuel Record Rally
Global gold prices have shattered records, decisively breaching the $4,000 psychological barrier and signaling a profound shift in the international financial landscape. This unprecedented rally is driven by a potent mix of geopolitical uncertainty, strategic central bank acquisitions, and growing anticipation of shifts in US monetary policy.
A Historic Ascent
The price of a global ounce of gold has surged by over a thousand dollars since the start of 2025. In a stunning market movement, it smashed through the $4,000 milestone and continued its relentless climb, reaching a staggering $4,179 on Tuesday morning. This represents a rapid increase of over $65 in a single day and an approximate $100 surge from the previous day’s opening, sending shockwaves through global commodity markets.
The Driving Forces Behind the Rally
Market analysts point to a confluence of key factors propelling this historic rally:
- Geopolitical and Economic Uncertainty: Persistent instability in international relations continues to drive investors towards safe-haven assets like gold.
- Central Bank Acquisitions: Sustained and significant gold purchases by various nations’ central banks are creating a strong foundation of demand.
- Anticipated US Monetary Policy: Markets are heavily betting on the US Federal Reserve initiating a cycle of interest rate cuts, with traders pricing in a 97% chance of a cut in October and a near-certainty of another in December. Lower interest rates reduce the opportunity cost of holding non-yielding bullion, making gold more attractive.
Philip Streible, Chief Market Strategist at Blue Line Futures, captured the bullish sentiment, stating, “Gold can easily continue its upward trend. We will likely see prices above $5,000 by the end of 2026.” He identified continuous central bank buying, strong inflows into gold-backed ETFs, and the prospect of lower US interest rates as the primary engines of this growth.
A recent catalyst was the decision by US President Donald Trump to end a fragile trade truce with China, reigniting tensions between the world’s two largest economies and further fueling the flight to safety among global investors.
The Domestic Market: A Contrasting Picture
While international markets experience a frenzy, the domestic gold market in Iran has shown relative stability in recent days. The upward pressure from rising global gold prices has been largely neutralized by a concurrent decrease in the value of the US dollar in the local market.
On Monday, the price for an 18-karat gold gram was recorded at 10,934,000 tomans, after briefly crossing the 11 million toman threshold. Despite the global record-breaking, significant domestic price volatility on Tuesday is not expected due to the offsetting effect of the weaker dollar.
In the coin sector, a downward trend was more evident. The Emami coin (new design) fell by over 274,000 tomans, while older design coins also saw notable declines. Only the one-gram coin experienced a slight increase.