Gold climbs at start of 2026 as dollar weakens

LONDON (January 2) Gold prices rose sharply on Friday as markets reopened for the first trading session of 2026, with a weaker US dollar and expectations of further interest rate cuts drawing buyers back into bullion.

Spot gold was trading at $4,386.13 an ounce by 09:55 GMT, reversing part of the pullback seen during the final days of 2025, when prices eased from record highs amid year-end profit taking.

The move higher came as the US dollar extended losses from late December, improving gold’s appeal for non-US investors and providing immediate price support at the start of the year.

Gold ended 2025 up more than 60%, its strongest annual performance in decades, after the Federal Reserve delivered multiple interest rate cuts and signalled a more accommodative stance. Markets are now pricing in further easing during 2026, reinforcing demand for non-yielding assets.

Safe-haven flows remain a dominant theme, with prolonged conflicts in Eastern Europe and the Middle East underpinning demand, while broader concerns over political risk and economic growth continue to support prices.

Central banks are another key driver, maintaining strong gold purchases, particularly in emerging markets, as part of efforts to diversify reserves away from the US dollar.

While prices retreated slightly from record highs toward the end of last year, analysts say the combination of looser monetary policy, geopolitical risk and official sector buying continue to provide a firm foundation for gold as 2026 begins.

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