What the volatile price of gold tells us  

Caught between security and volatility 

Against a backdrop of geopolitical and economic tensions and rising government debt, demand for safe investments is increasing. Despite its role as a safe haven, however, gold has been proving rather more volatile than we might expect. Its price has recently undergone massive swings in various market phases, such as falling by 14% in the space of three days when Donald Trump nominated the next Chairman of the US Federal Reserve, also placing assets like silver and Bitcoin under pressure. Movements like this clearly show that gold isn’t always the safest of havens and can in fact react sensitively to geopolitical and monetary policy shifts.

Geopolitics as an additional price driver 

Geopolitical developments act as a strong catalyst for gold demand. Analyses have demonstrated that investors increasingly seek out safe havens while global capital markets are beset by fragmentation, conflicts and changing balances of power.  

Switzerland is a leading hub for gold trading. Its refineries, trading networks and international links make the banking centre, which finances these, especially sensitive to news flow from global politics. Rising demand, potential export restrictions or international sanctions thus have a direct effect – first and foremost on the real economy.  

This is especially evident in trade flows: in the first half of 2025 alone, Switzerland exported more than 476 tonnes of gold with a value of CHF 39 billion to the US, where uncertainty, inflation and concerns over a further increase in government debt were pushing demand substantially higher. Besides private investors and central banks, stablecoins like Tether also play a key role here. Tether bought around 70 tonnes of gold in 2025, more than most central banks. Trade policy signals can also lead to big moves in the price of gold. The price rose, for instance, when the US government mooted tariffs on gold and then fell back again when it was announced that no such tariffs were planned.

2026 – the story so far 

This year started with a bang for gold. After an exceptionally strong performance in 2025, the uptrend continued unabated and was even faster and more pronounced than many market players had anticipated.  

As the year began, the price was around USD 4,330 per troy ounce. It shot up in the opening weeks on the back of sustained demand and a market environment that was still fraught with uncertainty. It was breaking records almost daily in mid-January and peaked at an all-time high of almost USD 5,600 on 28 January. The price had thus broken through the psychologically significant USD 5,000 mark quite decisively in just a few short weeks. 

Of course, this couldn’t go on forever. The record high was followed by a phase of heightened volatility. Profit-taking and speculation over the future direction of US monetary policy caused a marked correction at the end of January and the start of February. Over a few days, the gold price dipped below USD 5,000 at times before slowly stabilising. Since the outbreak of the Iran War on 28 February, there has been a renewed drop in share prices.

Outlook: where is the gold price headed next? 

The trend in the gold price going forward will probably be determined not only by isolated events but also by fundamental structural trends. Geopolitical uncertainty will play a central role: the bigger the shifts in global balances of power, the more attractive gold will become as a strategic reserve. At the same time, gold’s importance for central banks will increase further as many of them seek to diversify their currency reserves and reduce their dependency on traditional hard currencies. 

In this context, monetary policy also remains a key influencing factor, although not in terms of individual interest rate decisions but via its impact on perception of risk and liquidity conditions. Fluctuating inflation and changing interest rate expectations continue to favour demand for investments that tend to be stable. 

On top of this, political signals and regulatory decisions could trigger stronger market reactions in the short term than fundamentals. Last year’s debate over international trade and sanctions policies shows that even rumours of fresh barriers can affect the gold market, regardless of whether or not they’re borne out. 

Overall, there are plenty of reasons to expect that gold will gain relevance as a store of value in a more fragmented and politically sensitive global financial system – not necessarily through big price increases, but instead through its ever greater role as a strategic anchor in portfolios, government reserves and international trade.

Conclusion: gold remains relevant, but a differentiated view is needed  

The gold price tells a complex story. It reflects global uncertainty, reacts sensitively to political and economic shocks and also plays an important part in decision-making for institutional and private investors alike. With this in mind, gold can be a central component of diversification, but only as part of an overall investment strategy. These days, stability stems less from individual asset classes than from forward-looking risk management that factors in geopolitical and regulatory developments.