Gold Surges Past $5,000 Milestone Amid Escalating Geopolitical Tensions
The price of gold has soared to unprecedented heights, breaking through the $5,000 per ounce barrier for the first time as investors seek refuge in safe-haven assets. This remarkable rally comes amid a backdrop of heightened geopolitical uncertainty and market volatility, driven by fresh turmoil surrounding former President Donald Trump's trade policies.
Record-Breaking Rally for Precious Metals
On Monday morning, gold prices surged to $5,078 per ounce (£3,716), extending what has become a historic bull run for the precious metal. The price briefly touched $5,097.24 during trading, marking a significant milestone in gold's remarkable ascent.
Silver joined the precious metals rally, hurtling past the $100 per ounce threshold to trade at $109.71. This represents a dramatic increase from Friday's levels, with silver posting a further six per cent gain as investors diversify their safe-haven holdings.
Trump Tariff Threats Fuel Market Anxiety
The rush to precious metals follows renewed trade tensions sparked by Donald Trump's recent threats against Canada. The former president warned of imposing 100 per cent tariffs if the country proceeded with a "strategic partnership" with China, despite initially praising the agreement as "a good thing."
Tensions between the North American neighbours intensified following Canadian Prime Minister Mark Carney's speech at Davos, where he declared that the US-led world order had been ruptured. This diplomatic friction has contributed significantly to market unease.
Multiple Factors Driving Safe-Haven Demand
European Trade Standoff: Trump's confrontation with European leaders over Greenland's future created additional market turbulence, though he eventually pulled back tariff threats after butting heads with European counterparts.
US Shutdown Fears: Markets faced further pressure as Democrats threatened funding for the Department of Homeland Security following the shooting of Alex Pretti, a 37-year-old intensive care nurse, by federal immigration agents in Minneapolis.
Yen Volatility: Gold's increase coincided with the Japanese yen extending its advance against the dollar, with markets on heightened alert for potential government intervention. Prime Minister Sanae Takaichi has warned of action against "highly abnormal movements," potentially with rare US assistance.
Historic Bull Run Continues Unabated
Monday's record represents the latest achievement in gold's extraordinary rally, which has seen prices rocket since Trump's inauguration in January 2025. According to Richard Hunter, head of markets at Interactive Investor, "Haven investments are still in demand given the volatile backdrop."
Gold has now gained an impressive 94 per cent since the beginning of last year, with Hunter noting that "no immediate headwinds are in sight to prevent further progress for the precious metal." This sustained upward trajectory reflects deep-seated concerns about global economic stability and political uncertainty.
The combination of trade tensions, geopolitical friction, and domestic political uncertainty has created a perfect storm driving investors toward traditional safe-haven assets. As markets remain jittery and unpredictable, gold's glittering milestone appears to be just one chapter in an ongoing story of financial避险行为.
