Gold price soars above $5,020! Spot gold and silver are strengthening simultaneously!

In the afternoon session of February 20th, spot gold prices experienced a rapid climb, briefly surpassing the closely watched $5,020/oz mark with strong momentum. As of 14:54 that day, spot gold was trading at $5,026.34/oz, marking a 0.5% increase for the day. The price stabilized above $5,020, continuing the recent pattern of strong upward volatility. Meanwhile, spot silver, also part of the precious metals sector, exhibited a similar upward trend, gaining 0.53% to trade at $78.8/oz. This echoed gold, collectively driving increased activity in the precious metals market. According to real-time market quotes, London gold prices subsequently climbed further to $5,035.71/oz, expanding the increase to 0.97%. Spot silver also strengthened simultaneously to $80.667/oz, marking a 3.47% increase. This underscores the persistence and explosive power of the current market trend.

The recent breakthrough of spot gold above the key level of $5,020 is not an isolated short-term fluctuation, but rather the result of long-term resonance from multiple core factors, backed by clear market logic. As a globally recognized safe-haven asset, every significant fluctuation in gold prices is deeply tied to multiple factors such as global macroeconomics, geopolitics, and monetary policy, and this recent rise is no exception.

The continuous escalation of geopolitical risks has become an important "accelerant" driving the rise in gold prices. Recently, tensions have persisted in various parts of the world, with the situation in the Middle East being particularly tense. The US military has been prepared to launch military strikes against Iran, and there are significant differences in negotiations between the US and Iran. Meanwhile, the Russia-Ukraine conflict remains unresolved, with frontline warfare escalating continuously. The superposition of multiple geopolitical conflicts has led to a concentrated outbreak of global risk aversion sentiment. When global macro risks erupt intensively, investors, driven by the need for asset preservation and risk aversion, often regard gold as a core asset allocation. Large buying orders enter the market, driving gold prices to climb. This is also a core manifestation of gold's safe-haven attribute, just as events such as Brexit and the Russia-Ukraine conflict in history have all driven gold prices to surge.

The uncertainty surrounding the Federal Reserve's monetary policy, coupled with the weakening of the US dollar, has provided significant support for the rise in gold prices. The minutes of the January monetary policy meeting recently released by the Federal Reserve revealed significant internal disagreements among committee members, with opposing views from the dovish and hawkish factions, leading to an unclear policy path. This uncertainty has directly exerted pressure on the US dollar, causing it to weaken. Historically, gold and the US dollar have exhibited a clear negative correlation. When the creditworthiness of the US dollar declines and the exchange rate weakens, the cost for investors holding other currencies to purchase gold decreases, thereby enhancing the attractiveness of gold. Furthermore, market expectations for interest rate cuts by the Federal Reserve within the year persist. During the downward cycle of interest rates, the opportunity cost of holding interest-free assets such as gold decreases, further stimulating capital inflows into the gold market and driving up prices.

The continuous gold purchases by global central banks have provided long-term "underpinning" support for gold prices, becoming one of the core driving forces behind the long-term bullish trend of gold prices. In recent years, the global trend of "de-dollarization" has swept across the world, with many central banks increasing their gold reserves to hedge against exchange rate risks and enhance the safety of national reserve assets. Data shows that since 2022, the global central banks' gold purchases have exceeded 1,000 tons for three consecutive years. By the end of 2025, gold surpassed US Treasury bonds for the first time in 30 years, becoming the largest asset in the global central banks' reserve assets. Up to 95% of the central banks surveyed expect to continue increasing their gold holdings in the next 12 months. As the largest and most patient buyers in the market, the continuous gold purchases by central banks not only stabilize gold demand but also signal market recognition of gold's value, laying a solid foundation for gold prices to break through key thresholds.