Gold breaks through the $4,800 mark, why is safe-haven capital continuing to flow in?

Spot gold broke through the 4800 USD/oz level for the first time in history on January 21. According to the latest news, gold has gained over 10% this month, with a single-month increase of more than 480 USD. From 4689 USD on January 19 to the current 4800 USD, gold has risen over 100 USD in just two days. This not only reflects a technical breakthrough but also indicates a strong global market demand for safe-haven assets.

Multiple Driving Forces Behind the Historic Breakthrough

Geopolitical tensions boost safe-haven demand

Geopolitical risks have been a key catalyst for recent gold price increases. Statements from the Trump administration about tariffs on multiple European countries, as well as escalating issues related to Greenland and other geopolitical concerns, have strengthened market safe-haven sentiment. When trade frictions and geopolitical conflicts increase uncertainty, investors instinctively turn to traditional safe-haven assets like gold. According to related reports, this wave of gold price rise coincided with a decline in European stock markets (DAX down 1.1%, CAC 40 down 1.3%), reflecting a transfer of funds from risk assets to safe-haven assets.

Central banks’ continued accumulation provides structural support

Central bank buying activity has provided a solid price floor for gold. According to reports, central banks led by China, India, and some Middle Eastern countries continued their strong gold purchasing pace in Q4 2025 and early 2026, aiming to reduce reliance on USD assets. This structural demand is not short-term speculation but a long-term strategic allocation, offering lasting support for gold prices.

Fed rate cut expectations support long-term allocation

Latest data shows a 95% probability that the Federal Reserve will keep interest rates unchanged in January, but the expectation for rate cuts has been pushed back to June. The low-interest-rate environment reduces the opportunity cost of holding gold, increasing the willingness of funds to allocate to gold. This is a core logic supporting gold prices and explains why gold can continue to hit new highs in the short term.

Increasing holdings in the world’s largest gold ETF signal strength

Institutional fund allocations often indicate market trends. The world’s largest gold ETF (iShares Gold Trust) recently increased holdings significantly, with a single-day addition of 10.87 tons, the largest since December 23, 2025. The rising demand from institutional investors reflects recognition of gold’s medium- to long-term value.

Market Chain Reactions Driven by the Strong Performance of Precious Metals

Gold’s strong performance is not isolated. Spot silver also hit new highs during the same period, reaching a peak of 93.69 USD/oz, with an intraday increase of over 4%. The overall strength of the precious metals market is attracting substantial liquidity. According to observations from related reports, this frenzy of precious metals’ rise is diverting flows from other assets, especially impacting the cryptocurrency market. When traditional safe-haven assets attract massive inflows, the capital support for risk assets like Bitcoin tends to weaken, which is a structural change market participants should be aware of.

Technical Strength Signals

From a technical perspective, gold has completed the transition from resistance at 4650 USD to support. Currently, the price remains above multiple moving averages, maintaining a healthy short-term technical structure. Although the current price deviation from moving averages is large, posing a risk of technical correction, the overall trend remains bullish.

Summary

Gold’s breakthrough of the 4800 USD level results from multiple factors working together. Geopolitical tensions, structural central bank accumulation, Fed rate cut expectations, and institutional inflows form a strong support system. The over 10% increase this month clearly demonstrates market appetite for safe-haven assets. However, it is important to note that when the price deviates significantly from moving averages, the risk of technical pullback increases. For investors, understanding whether this rally is driven by structural factors (central bank accumulation, rate cut expectations) or short-term events (geopolitical incidents) will determine its sustainability.