Geopolitical risk can push gold higher from here, but at $4,690/oz, you are no longer in a “normal fundamentals” market. You are in a risk-premium + currency-credibility market, where upside can extend further than many expect, but pullbacks can also be violent.
Here’s the clean way to frame it.
1) How much further can geopolitics drive gold?
Geopolitics drives the “fear bid”, but it needs follow-through
Gold rallies hardest when geopolitics evolves from:
headline risk → to policy risk (tariffs, sanctions, trade retaliation)
policy risk → to capital flight / currency hedging
currency hedging → to central bank demand and retail panic bids
At this point, the move looks like it is being powered by policy credibility concerns + devaluation hedging, not just “war headlines”.
That is why it can still run.
2) The key question: is this a “spike” or a “regime shift”?
Scenario A: Spike (geopolitics fades, gold cools)
If tensions de-escalate or markets decide tariffs are negotiable:
Gold can retrace quickly even if the long-term trend stays up.
The “fear premium” compresses.
Typical outcome: sharp pullback, then consolidation.
Scenario B: Regime shift (geopolitics becomes macro)
If tariffs widen, retaliation escalates, and global trade fragments further:
Inflation risk rises
Growth uncertainty rises
Real rates may fall (or at least become less supportive for bonds)
Confidence in fiat policy coherence weakens
That is when gold can grind higher for months, not days.
3) What levels matter from here?
At these prices, thinking in percentage moves is more useful than picking an exact target.
A further +5% from $4,690 puts gold near $4,925
+10% puts it around $5,160
+15% puts it near $5,390
Those numbers sound extreme, but in a credibility shock, gold can overshoot.
My base case: geopolitics alone can still add another 5–10%, if it stays tied to currency and policy risk, not just headlines.
4) What would be the “ceiling” for geopolitical upside?
Gold usually hits a ceiling when one of these happens:
The USD strengthens sharply
A strong USD is the fastest way to cool gold.
Real yields jump
If bond yields rise faster than inflation expectations, gold loses some appeal.
Positioning becomes crowded
When everyone is already hedged, marginal buyers disappear.
A credible policy stabiliser appears
Clearer Fed path, calmer fiscal narrative, reduced institutional stress.
5) The bigger driver now: “devaluation trade” psychology
Your framing is important: the market is treating gold less like a commodity and more like:
a currency alternative
a political risk hedge
a trust hedge (institutions, policy independence, fiscal discipline)
That type of bid is stickier than a typical risk-off spike.
Bottom line
Geopolitical risk can still drive gold meaningfully higher from here, but only if it keeps feeding into currency credibility and policy uncertainty. In that case, another 5–10% upside is realistic, with sharp corrections along the way.
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