Gold surged past the $5,000 mark for the first time on Monday, hitting a record high as investors rushed into the safe haven amid mounting geopolitical and policy uncertainty. Spot gold climbed 1.98% to $5,081.18 per ounce by 0323 GMT, after touching an intraday peak of $5,092.71. U.S. gold futures for February delivery rose 2.01% to $5,079.30 per ounce.
The rally extends a historic run for the metal, which soared 64% in 2025 on the back of persistent safe haven demand, easing U.S. monetary policy, strong central bank purchases, and record inflows into exchange traded funds. China continued its gold buying spree for a fourteenth straight month in December, reinforcing bullish sentiment. Prices are already up more than 17% this year.
Analysts point to growing unease over U.S. policy direction as the latest trigger for the surge. Kyle Rodda, a senior market analyst at Capital.com, said the move reflects a deepening crisis of confidence in the U.S. administration and U.S. assets, sparked by erratic decision making from President Donald Trump’s administration last week.
Trump recently reversed threats to impose tariffs on European allies as leverage to seize Greenland. Over the weekend, he warned of a 100% tariff on Canada if it proceeds with a trade deal with China, and threatened to slap 200% tariffs on French wines and champagnes in a bid to pressure French President Emmanuel Macron into backing his proposed Board of Peace initiative. Critics fear the plan could weaken the United Nations’ role in global conflict resolution, although Trump has said it would work alongside the UN.
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According to Rodda, the policy uncertainty has fundamentally altered investor behavior. He said the administration’s actions have created a permanent rupture in how markets operate, pushing investors toward gold as the only credible alternative.
The rally was further supported by a weaker dollar, which slipped as the yen strengthened and markets grew alert to possible intervention. Investors also pared back dollar positions ahead of this week’s Federal Reserve meeting. A softer dollar makes gold cheaper for holders of other currencies, adding to demand.
Looking ahead, analysts remain bullish. Philip Newman, director at Metals Focus, said prices are likely to push higher, with forecasts suggesting gold could peak around $5,500 later this year. He noted that while profit taking could trigger periodic pullbacks, any corrections are expected to be brief and met with strong buying interest.
Other precious metals also posted sharp gains. Spot silver jumped 5.79% to $108.91 per ounce after hitting a record $109.44. Platinum rose 3.77% to $2,871.40, touching a session high of $2,891.60, while palladium gained 3.2% to $2,075.30, its highest level in more than three years.
Silver crossed the $100 threshold for the first time on Friday, extending a powerful rally driven by retail investor inflows, momentum based buying, and prolonged tightness in physical supply markets.