Gold Prices Rebound After Early Plunge Amid Middle East Tensions, U.S. Shutdown Concerns

Gold hits new record high as investors weigh geopolitical risks and Federal Reserve policy

Jan. 29, 2026 at 2:07pm

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Gold prices recovered from an early nosedive on Thursday, closing at a new record high of $5,318.40 per troy ounce, as investors assessed growing tensions in the Middle East and the ongoing efforts by U.S. Congressional leaders to avert a partial government shutdown. The price of gold had initially plunged by as much as 3.89% before rebounding over the course of the trading day.

Why it matters

The fluctuations in gold prices reflect heightened global uncertainty, with investors seeking safe-haven assets amid the escalating crisis between the U.S. and Iran, as well as concerns over a potential government shutdown in the U.S. The record-setting gold prices underscore the continued appeal of the precious metal as a hedge against economic and geopolitical instability.

The details

Gold for February delivery closed up $14.80 (0.28%) at $5,318.40 per troy ounce after earlier dropping as low as $5,097.50. Silver for February also climbed, rising 87.50 cents (0.77%) to $114.037 per troy ounce. The rally in precious metals comes as tensions between the U.S. and Iran have escalated, with President Trump warning Iran that time is running out for a nuclear deal. Iran has rejected any talks induced by "coercive threats" and vowed to retaliate strongly against any U.S. attack. Meanwhile, U.S. lawmakers are racing to reach a deal to avert a partial government shutdown before funding expires on January 30.

  • On Thursday, January 29, 2026, gold prices initially plunged as much as 3.89% before recovering.
  • The U.S. government funding is set to expire on Friday, January 30, 2026 at 11:59 p.m. E.T.

The players

Donald Trump

The President of the United States who has warned Iran that time is running out for a nuclear deal and threatened harsher military action if Iran fails to agree to talks.

Iran

The Middle Eastern country that has rejected any talks induced by "coercive threats" from the U.S. and vowed to strike back "immediately and powerfully" against any possible U.S. attack.

John Thune

The Senate Majority Leader who indicated that the door is open for discussion on a federal funding bill to avert a partial government shutdown, but emphasized that the onus would be on Democrats to reach a deal with the White House.

Jerome Powell

The Chair of the U.S. Federal Reserve who downplayed the significance of gold's recent rally and dismissed concerns over the Fed's credibility during his press conference after the central bank's interest rate announcement.

World Gold Council

The London-based organization that predicted strong demand for gold will continue in 2026 as economic and geopolitical instability are still causes for concern.

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What they’re saying

“We must not let individuals continue to damage private property in San Francisco.”

— Robert Jenkins, San Francisco resident (San Francisco Chronicle)

The takeaway

The volatility in gold prices reflects the heightened global uncertainty, with investors seeking safe-haven assets amid escalating geopolitical tensions and concerns over a potential government shutdown in the U.S. The record-setting gold prices underscore the continued appeal of the precious metal as a hedge against economic and political instability.