Historic milestone for precious metals
The price of gold has surged above $5,000 per ounce for the first time in history, extending a powerful rally after the metal gained more than 60% during 2025.
The latest move comes amid heightened geopolitical and financial uncertainty, including renewed tensions between the United States and NATO over Greenland and growing unease around U.S. trade policy.
Geopolitics and trade fears fuel demand
Markets have been unsettled by U.S. President Donald Trump’s tariff threats, including a warning over the weekend of a potential 100% tariff on Canada if it reaches a trade deal with China.
Gold and silver are traditionally viewed as safe-haven assets, attracting investors during periods of instability. Silver also hit a record this week, climbing above $100 an ounce after nearly doubling last year.
Ongoing wars in Ukraine and Gaza, along with escalating diplomatic disputes involving Venezuela, have further reinforced demand for assets perceived as stores of value.
Interest rates, inflation and central banks
Expectations that the U.S. Federal Reserve will cut interest rates again this year have added momentum to gold’s rise. Lower interest rates reduce the appeal of bonds and other yield-based investments, making non-yielding assets like gold more attractive.
Higher-than-usual inflation, a weaker U.S. dollar and sustained buying by central banks have also played a major role. Central banks added hundreds of tonnes of gold to their reserves last year, signaling a continued shift away from dollar-based assets.
Scarcity underpins long-term appeal
Gold’s limited supply remains one of its strongest attractions. Around 216,000 tonnes have ever been mined, according to the World Gold Council, with global underground reserves estimated at roughly 64,000 tonnes.
Experts expect supply growth to slow in the coming years, reinforcing gold’s status as a long-term hedge against monetary and geopolitical risk.
Cultural demand adds support
Beyond financial markets, cultural demand continues to underpin prices. In countries such as India and China, gold plays a major role in festivals, weddings and long-term household savings.
Analysts note seasonal increases in buying around events such as Diwali and the Chinese New Year, contributing to sustained global demand.
Outlook remains news-driven
While analysts remain broadly bullish, some caution that the rally is highly sensitive to global headlines. Any unexpected easing of geopolitical or economic tensions could prompt short-term pullbacks.
For now, however, gold’s role as a diversifier in an uncertain world appears firmly reinforced.
