On January 26, 2026, the global commodities market witnessed a historic milestone as spot gold and COMEX gold futures prices both shattered the psychological barrier of $5,000 per ounce, setting a new all-time high in financial history. Instead of triggering widespread profit-taking, the breaching of this long-standing price ceiling attracted a surge of even more aggressive buying interest. Traders are heavily betting through far-dated call options with strike prices ranging from $5,500 to $6,000, signaling a strong consensus among major market players regarding the "second half" of the gold bull market.
Gold prices soared by as much as 2.5% during the session, breaking through the $5,100 mark and lifting the entire metals sector. This rally is partly fueled by the resurgence of so-called "fiat currency debasement trades"—investors are accelerating their exit from sovereign bonds and currencies, seeking refuge in hard assets like gold and silver. As former U.S. President Donald Trump continues to challenge the post-World War II rules-based international order, markets anticipate that investors will speed up diversification, gradually reducing their exposure to U.S. assets.
From the perspective of options market dynamics, the breakthrough of the $5,000 level has triggered a rare "gamma squeeze" effect. As the pace of gold's ascent exceeded the expectations of many options sellers, numerous financial institutions shorting volatility were forced to engage in large-scale covering of positions in the spot and futures markets to hedge their risks. This passive buying has resonated with the prevailing bullish sentiment, creating a feedback loop that further propels prices higher.
Specifically, the implied volatility for gold futures on the COMEX has climbed to its highest level since the initial outbreak of the global pandemic in March 2020. Concurrently, volatility for the SPDR Gold Shares (GLD) ETF, the world's largest gold-backed fund managed by State Street Global Advisors, has also broken out to the upside. Market traders are broadly betting on a significant upward move in gold prices.
Trading volume is notably active in call spreads: nearly 5,000 contracts of the April $5,550/$5,600 call spread traded on the COMEX. Around the same time, a 1x3x2 strategy combination using the $5,500/$6,000/$6,500 strike tiers also saw 1,000 contracts traded. Investors are also buying call spreads on the SPDR Gold Shares ETF on a massive scale, including approximately 70,000 contracts of the September $590/$595 spread and 37,000 contracts of the March $510/$515 spread.
By employing these structured strategies, investors are positioning for further gold price appreciation in the coming months at a relatively low cost. According to analysis by Susquehanna International Group strategists, if the ETF's price rises by an additional 10.1%, the potential return on the March positions could reach a staggering 420%.
Akash Doshi, Global Head of Metals & Gold Strategy at State Street Global Advisors, revealed that of the total $4.7 billion inflows into US-listed gold ETFs in January, more than half went into the SPDR Gold Shares (GLT), the world's largest gold ETF. Doshi noted, "This phenomenon likely reflects strong institutional inflows and active long positioning by market makers in the gold market, as focus intensified on the potential breakthrough of the key $5,000 level."
"Considering persistently high geopolitical risks, the structural factors supporting gold since 2025 remain intact, and coupled with strengthening expectations for a weaker US dollar, we believe the current active trading in call spreads essentially reflects investor demand for expectations of further upside in gold prices," Doshi added.
In the silver market, volatility and call skew (the premium of call options over put options) have also surged significantly. Specific trading data shows: over 35,000 contracts of the iShares Silver Trust (SLV) May $125 strike call options traded. Concurrently, 200 contracts of April-expiry condor strategies with strikes at $110/$120/$130/$140 also traded on the COMEX.
Simultaneously, the pricing dynamics of gold are undergoing a profound transformation. The market no longer simply views it as a tool against inflation but increasingly as the paramount safe-haven asset to hedge against global sovereign credit instability and the ongoing "de-dollarization" trend.
The core drivers behind this gold price surge stem from persistently tense geopolitics and a systemic decline in confidence in the US dollar. Since the beginning of 2026, the US's hardline stance on tariff policies and territorial disputes has intensified trade frictions with key allies like Canada and Japan, pushing the US Dollar Index to a near five-year low. Compounded by the complex situation in the Middle East, global safe-haven capital has flooded into gold reserves.
Furthermore, strategic accumulation of gold by global central banks continues unabated. Most sovereign wealth funds have raised their allocation to gold within their portfolios to historically high levels, providing a solid floor for gold prices.
Looking ahead, top Wall Street investment banks have swiftly raised their price targets for 2026. Goldman Sachs noted in a recent report that gold's break above $5,000 marks its entry into a "sovereign value re-rating" phase, raising its year-end target to $5,400. Bank of America is even more optimistic, projecting that gold could reach the $6,000 mark this spring if geopolitical tensions do not substantially ease.
Despite the current euphoric sentiment, professional analysts caution investors that as gold prices venture into the "uncharted territory" above $5,000, short-term volatility is likely to amplify significantly. They warn of the risks of wide, high-amplitude fluctuations potentially triggered by momentum trading.
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