The price of gold surged above $5,000 an ounce for the first time on Monday, reaching a record high of $5,100 before settling at $5,091. The milestone comes as investors seek safe havens amid chaotic US policies and global market uncertainty.
Analysts attribute the rally to Donald Trump's tariff threats against Canada and tensions with Europe over Greenland, as well as fears of a US government shutdown after a fatal incident involving federal agents. Since Trump's second inauguration over a year ago, gold prices have jumped nearly 90%.
Independent analyst Ross Norman said gold has become a safe haven from stocks and bonds influenced by erratic policy shifts. He predicted further gains, with a high of $6,400 an ounce this year and an average of $5,375 in 2026. “The only certainty at the moment seems to be uncertainty, and that’s playing very much into gold’s hands,” Norman said.
Steve Miller, an investment strategy adviser at Australian asset manager GSFM, called the rise the most spectacular in his four decades in financial markets, comparing it to the oil shock and inflation scare of the late 1970s and early 1980s.
Anxiety in money markets has been fuelled by Japan's new Prime Minister Sanae Takaichi, who has pledged tax cuts to address food costs. Her unfunded spending plans spooked investors, reminiscent of the UK's 2022 mini-budget crisis. Japan's $9 trillion debt, the highest among G7 nations, has added to concerns.
Miller noted that gold's rise also reflects expectations that the US Federal Reserve may weaken the dollar to support domestic manufacturing. The dollar lost nearly 10% of its value last year, and further declines are anticipated as the Fed cuts interest rates.
