Gold prices hit fresh records on Monday, climbing above $5,000 an ounce for the first time, as global uncertainty and policy tensions linked to US President Donald Trump’s administration unsettled investors.
The precious metal rose to as high as $5,111.07 an ounce during Asian trading, extending a strong rally driven by demand for safe-haven assets.
“It vaulted over the psychologically important $5,000 mark on a glittering streak, heading sharply higher as trade tensions emanating from the US unnerved investors,” said Susannah Streeter, chief investment strategist at Wealth Club.
She added that the decline of the US dollar played a key role, noting that the greenback weakened against the yen amid growing concerns about tariffs, high government spending and inflation in the US economy.
Silver also joined the rally, hitting a record high above $110 an ounce.
A Rally Years in the Making
Although recent momentum has been supported by geopolitical tensions, pressure on the US Federal Reserve and renewed debate over US trade policy, analysts say gold’s rise reflects a longer-term repricing of risk.
Gold traded just above $2,000 an ounce in January 2024 and has since benefited from strong central bank buying, persistent inflation and heightened geopolitical risks, including the wars in Ukraine and Gaza, as well as US involvement in Venezuela.
“Gold has not been marching higher because of daily drama,” said independent analyst Stephen Innes. “It has been repriced because investors are slowly recalibrating what stability costs in a world drowning in debt.”
Market analysts also pointed to fears of a potential US government shutdown and renewed trade threats, including Trump’s warning of possible 100 per cent tariffs on Canada if it concludes a trade deal with China.
“Gold soared past the $5,000 mark for the first time, fuelled by its appeal as a safe-haven asset,” said Patrick Munnelly, a market strategist at Tickmill Group.
He added that concerns over possible US intervention in Japan’s foreign exchange market further weighed on the dollar, dampening confidence in the global reserve currency.
Investors are also watching this week’s Federal Reserve policy meeting closely, following legal actions taken by US prosecutors against Fed Chair Jerome Powell, which have raised concerns about the central bank’s independence. Several major central banks have since voiced support for the Fed and Powell.
According to the World Gold Council, global gold demand by value rose 44 per cent year-on-year to a record $146 billion in the third quarter of last year, supported by strong inflows into exchange-traded funds, which allow investors to gain exposure to gold without trading futures.
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