Gold prices surged to a new record above $5,000 per ounce on Monday, extending a historic rally as investors rushed into the safe-haven metal amid growing geopolitical tensions and global trade uncertainty.
Spot gold climbed 1.79% to $5,071.96 per ounce, after touching an intraday high of $5,085.50, while US gold futures for February delivery rose 1.79% to $5,068.70.
The precious metal has now gained more than 64% in 2025, reflecting sustained investor demand and strong institutional buying.
Safe-Haven Buying Boosted by Trade and Political Risks
Market sentiment has been shaken by escalating geopolitical developments and aggressive trade rhetoric. US President Donald Trump recently eased tariff threats against European allies related to Greenland negotiations but reiterated plans to impose 100% tariffs on Canada if it proceeds with trade agreements involving China.
He has also warned of 200% tariffs on French wine and champagne, adding to global market volatility and strengthening gold’s appeal as a hedge against political and economic risk.
Central Bank Buying and ETF Inflows Fuel Gold Rally
Gold’s powerful uptrend is also being driven by strong central bank purchases, particularly from China, which has increased gold reserves for 14 consecutive months. In addition, record inflows into gold-backed exchange-traded funds (ETFs) have significantly boosted investment demand.
Expectations of future US interest rate cuts by the Federal Reserve have further supported gold prices, as lower rates reduce the opportunity cost of holding non-yielding assets like gold.
Weak Dollar and Strong Yen Add Further Support
A strengthening Japanese yen has pressured the US dollar, making dollar-priced gold cheaper for buyers using other currencies. Investors are trimming dollar positions ahead of the upcoming Federal Reserve policy meeting, increasing demand for alternative stores of value.
A weaker dollar typically supports higher gold prices, especially during periods of heightened financial uncertainty.
Analysts Forecast Gold Could Reach $5,500 This Year
Market analysts remain bullish on gold’s outlook. Philip Newman, director at Metals Focus, said prices could climb even higher despite short-term corrections. He noted that while profit-taking may trigger brief pullbacks, strong underlying demand is likely to keep any declines short-lived.
“We expect further upside for gold, with prices likely to peak around $5,500 later this year,” Newman said, citing continued safe-haven flows and structural demand from central banks.
Silver, Platinum, and Palladium Also Rally Sharply
Other precious metals also posted strong gains alongside gold. Spot silver jumped 4.57% to $107.65 per ounce after hitting a record $108.60, while platinum rose 3.26% to $2,857.41 and palladium gained 3.2% to $2,074.40.
Silver crossed the $100 per ounce mark for the first time last week, building on a 147% surge last year, driven by retail investor inflows, momentum-based trading, and tight physical supply in global markets.
Precious Metals Gain as Investors Seek Inflation and Crisis Hedges
With inflation risks, geopolitical instability, and trade conflicts intensifying, investors are increasingly shifting toward precious metals as portfolio protection.
Analysts say gold and silver are benefiting not only from fear-driven demand but also from long-term structural trends such as reserve diversification by central banks and supply constraints in mining output.
