Gold surged to a fresh record above $5,100 an ounce on Monday, extending one of the strongest rallies in modern market history as investors rushed into the safe-haven asset amid rising geopolitical tensions, policy uncertainty in Washington, and a weakening U.S. dollar.
Spot gold rose 2.2% to $5,089.78 an ounce by 0656 GMT, after earlier touching an all-time high of $5,110.50. U.S. gold futures for February delivery climbed by the same margin to $5,086.30 an ounce, underscoring the strength of demand across physical and derivatives markets.
The latest surge adds to a historic run. Gold soared 64% in 2025, its biggest annual gain since 1979, driven by a powerful mix of safe-haven demand, easing U.S. monetary policy, aggressive central bank buying, and record inflows into exchange-traded funds. Prices have already risen more than 18% this year and have posted consecutive record highs over the past week.
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Market participants say the current rally is being fueled less by traditional inflation fears and more by deepening concerns over geopolitical stability and confidence in U.S. leadership.
“The latest catalyst is effectively this crisis of confidence in the U.S. administration and U.S. assets, that was set off by some of the erratic decision-making from the Trump administration last week,” said Kyle Rodda, a senior market analyst at Capital.com.
Those concerns have been amplified by a string of abrupt and confrontational trade threats from President Donald Trump. Last week, Trump stepped back from threats to impose tariffs on European allies as leverage in a bid to assert U.S. control over Greenland, a move that had already rattled markets before it was softened. Over the weekend, he warned that the U.S. would impose 100% tariffs on Canada if Ottawa followed through on a trade deal with China, reigniting fears of a broader trade conflict involving close U.S. allies.
Trump has also threatened to slap 200% tariffs on French wines and champagnes, an apparent attempt to pressure French President Emmanuel Macron into joining his proposed “Board of Peace.” While Trump has said the initiative would work alongside the United Nations, some observers worry it could weaken the U.N.’s standing as the primary global forum for conflict resolution.
“This Trump administration has caused a permanent rupture in the way things are done, and so now everyone’s kind of running to gold as the only alternative,” Rodda said.
Currency markets added further momentum to the rally. A strengthening Japanese yen weighed on the U.S. dollar on Monday, with traders on alert for possible intervention to slow the yen’s rise. Investors also trimmed dollar positions ahead of this week’s Federal Reserve meeting, where policymakers are expected to keep interest rates unchanged but may offer clues on the timing of future cuts.
A weaker dollar typically supports gold, which is priced in U.S. currency, by making it cheaper for buyers using other currencies. Combined with falling real yields and heightened political risk, the environment has proved especially supportive for bullion.
Central bank demand has remained a key pillar of the rally. China extended its gold-buying streak to a fourteenth consecutive month in December, reinforcing a broader trend among emerging market central banks seeking to diversify reserves away from the dollar. At the same time, retail and institutional investors have poured money into gold-backed ETFs at a pace not seen in years.
Analysts increasingly see further upside. Some forecasts now place gold on course to test levels once considered unthinkable.
“We expect further upside,” said Philip Newman, director at Metals Focus. “Our current forecast suggests that prices will peak at around $5,500 later this year.”
“Periodic pullbacks are likely as investors take profits, but we expect each correction to be short-lived and met with strong buying interest,” he added.
The rally has not been confined to gold. Silver jumped 4.8% to $107.903 an ounce after hitting a record high of $109.44 earlier in the session. Platinum climbed 3.4% to $2,861.91, after touching an all-time high of $2,891.6, while palladium rose 2.5% to $2,060.70, its highest level in more than three years.
Silver’s move has been particularly striking as the metal broke above the $100 mark for the first time on Friday, building on a 147% surge last year. Analysts say strong retail-investor inflows, momentum-driven buying, and persistent tightness in physical supply have combined to push prices sharply higher.
With geopolitical risks mounting, trade tensions flaring, and confidence in traditional financial anchors under strain, gold’s role as a store of value has rarely looked stronger. Thus, investors appear willing to keep paying record prices for what they see as the ultimate hedge against uncertainty.