Gold Hits Record High on Political Uncertainty: Can the ETF Rally Last?

Gold hit a record high as escalating political tensions in the United States and worsening unrest in Iran led investors toward safe-haven assets, per Bloomberg, as quoted on Yahoo Finance. Bullion climbed to just below $4,600 an ounce on Jan. 12, 2026, reflecting heightened uncertainty across global markets.

Justice Department Move Raises Fed Independence Fears

The rally came after Federal Reserve Chair Jerome Powell said that the central bank was served with grand jury subpoenas from the U.S. Justice Department related to his June congressional testimony on renovations at the Fed’s headquarters. The move signaled President Donald Trump’s dispute with Powell, reigniting concerns about political interference and the independence of U.S. monetary policy.

Iran Protests Add to Haven Demand

At the same time, deadly protests in Iran intensified geopolitical risks. The prospect of political upheaval in the Islamic Republic injected fresh uncertainty into global geopolitics and oil markets, further boosting demand for precious metals.

Trump said on Sunday that he was considering potential actions on Iran, while again threatening to take Greenland and questioning the value of the NATO alliance — remarks that added to market unease.

Rate-Cut Expectations Rise

Last week’s softer-than-expected U.S. jobs report reinforced bets that the Federal Reserve will continue cutting interest rates to support the economy. Markets are now pricing in at least two rate cuts this year, as mentioned in the above-said Bloomberg article. 

Central Bank Buying

Another key driver of the gold rally has been the surging central bank demand, especially from BRICS nations and emerging economies that are actively working to diversify away from the U.S. dollar. This global de-dollarization trend has resulted in record levels of sovereign gold purchases.

Gold to Hit $10,000 by 2030?

Gold is coming off a record-setting year, thanks to Fed rate cuts and falling interest rates, trade tensions, and declining confidence in the U.S. dollar. The gold bullion-based exchange-traded fund (ETF) SPDR Gold Trust GLD has gained 68.7% over the past year and is up 3.2% so far this year (as of Jan. 9, 2026). Gold may reach $10,000 an ounce by 2030, per market expert Ed Yardeni, as quoted on a Business Insider article issued in early October 2025.

Should You Follow Ray Dalio’s Suggestion?

Early last October, Bridgewater Associates founder Ray Dalio advised investors to allocate up to 15% of their portfolios to gold, as quoted on CNBC. Dalio stressed gold’s unique role as a hedge against monetary debasement and geopolitical uncertainty.

Dalio compared today’s market environment to the early 1970s, which was a period of high inflation, heavy government spending, and growing debt, which hurt confidence in paper assets and government-issued money.

Is Gold the Best Safe-Haven Right Now?

While Fed rate cuts may reduce the value of the greenback now, the strong supply of debt also makes debt instruments unappealing. This leaves gold as the only credible source of safe haven at present.

Unlike gold, other so-called safe-haven ETFs have offered muted performances this year. Invesco DB US Dollar Index Bullish Fund UUP has declined about 8.4% over the past year. The UUP ETF has added only 0.9% so far this year, underperforming GLD. Over the past one-year period, iShares 7-10 Year Treasury Bond ETF IEF has added about 5.6% (while it is up 0.01% year-to-date), and Invesco CurrencyShares Japanese Yen Trust FXY has lost about 0.5% (as of Jan. 9, 2026) (it is down 0.7% so far this year).

Gold ETFs in Focus

For investors looking to capitalize on this long-term bullish trend, gold ETFs such as SPDR Gold Trust (GLD), iShares Gold Trust IAU and SPDR Gold MiniShares Trust IAUM could prove to be great bets right now.

Any Caveat?

The Bank for International Settlements indicated lately that gold is entering bubble territory, fueled by rising demand for gold from retail investors, and cautioned about “a sharp and swift correction,” as quoted on The Banker. Investors need to closely monitor the prognosis of the U.S. rate cuts and geopolitics before investing in gold materially.

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This article originally published on Zacks Investment Research (zacks.com).

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