As long as the three pillars underpinning the XAU/USD rally remain intact, gold will continue to rise. These are the weakness of the U.S. dollar, the growing debt of the world's largest economies, and geopolitics. These factors have allowed the precious metal to exceed the $4,800 per ounce mark for the first time in history. Since the beginning of the year, it has risen by more than 10% following a 65% surge in 2025.

The U.S. dollar started on a positive note amid a pause in the Federal Reserve's monetary easing cycle, but it may end on a sour one. Donald Trump's tariff threats against Europe have revived the "sell America" trade, putting the greenback under pressure—especially as pressure from the White House on the central bank is intensifying. The court case over the dismissal of Lisa Cook from her position as an FOMC governor is a test of independence. If it fails, interest rates will be cut at the president's behest.

Dynamics of Gold ETF Holdings

U.S. equity and bond markets are the largest and most liquid in the world. Their share in the overall portfolio structure of global asset managers and hedge funds is substantial. Uncertainty surrounding White House policy is prompting thoughts of diversification, and it is hard to find a better safe haven than gold. Hence its reaction to the decline in the USD index and the rise in holdings of specialized exchange-traded funds to their highest levels since 2022.

An important driver of the XAU/USD rally is the so-called debasement trade. It is based on the fact that gold exists outside fiat currencies. Erosion of trust in them and in government bonds provides grounds for buying the precious metal. In this respect, one of the reasons for its surge above $4,800 per ounce lies outside the United States. In Japan, yields on 30- and 40-year bonds have soared to record highs, increasing debt servicing costs and raising concerns about financial stability.

Dynamics of Gold Stocks on COMEX

Finally, geopolitics is lending support to XAU/USD. It all began with the armed conflict in Ukraine, with Russia, and with Europe freezing €210 billion of Russian assets. Since then, thanks to de-dollarization, reserve diversification, and the rally in gold, Moscow has earned $216 billion—even without active participation in the bullion market. Other central banks are active, intensifying shortages linked to the flow of metal into the United States.

And there is more to come. After observing Russia's gains, Donald Trump expressed a desire to annex Greenland. Canada and Venezuela could follow. Under such conditions, how could XAU/USD not rise? Its safe-haven status compels it to do so. We may be witnessing a historic split within the West.

Technically, the daily gold chart shows a strengthening uptrend. This is manifested by prices moving further away from dynamic support in the form of a moving average. Previously stated long targets at $4,730 and $4,820 per ounce have been reached. It makes sense to stick to the existing strategy of buying on pullbacks. A new target level is $5,050.