Gold prices surged to an unprecedented high, exceeding $5,000 per ounce on Monday, as investors increasingly turned to this safe-haven asset amidst escalating geopolitical tensions. By 01:59 GMT, spot gold had risen by 1.79% to $5,071.96 per ounce, following a peak of $5,085.50 earlier. U.S. gold futures for February delivery also increased by 1.79%, reaching $5,068.70 per ounce.
The precious metal experienced a remarkable 64% increase in 2025, fueled by continuous demand for safe-haven investments, easing of U.S. monetary policy, and vigorous central bank purchases. Notably, China extended its gold-buying spree for the fourteenth consecutive month in December. Additionally, record inflows into exchange-traded funds contributed to the upward trend, with prices rising over 17% this year.
Kyle Rodda, a senior market analyst at Capital.com, commented on the recent developments, stating that the pivotal factor is the “crisis of confidence in the U.S. administration and U.S. assets,” triggered by erratic decisions made by the Trump administration last week. President Donald Trump unexpectedly withdrew threats to impose tariffs on European allies as a strategy to acquire Greenland. Over the weekend, he announced plans to impose a 100% tariff on Canada should they proceed with a trade agreement with China. Furthermore, he threatened to levy 200% tariffs on French wines and champagnes, seemingly to pressure French President Emmanuel Macron to join his Board of Peace initiative. Some observers express concerns that this board could undermine the United Nations’ role as the primary global platform for conflict resolution, despite Trump’s assertion that it will cooperate with the U.N.
Rodda further noted, “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.”
In the currency markets, a strengthening yen contributed to a broad decline in the dollar early on Monday. Markets remain vigilant for potential intervention in the yen, with investors reducing dollar positions ahead of the upcoming Federal Reserve meeting. A weaker dollar tends to make gold, which is priced in dollars, more accessible to holders of other currencies.
Philip Newman, director at Metals Focus, expressed optimism about the future of gold prices, stating, “We expect further upside for gold. 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.”
In other precious metals markets, spot silver climbed 4.57% to $107.65 per ounce, after reaching a record high of $108.60. Spot platinum increased by 3.26% to $2,857.41 per ounce, while spot palladium rose by 3.2% to $2,074.40 per ounce. Silver broke through the $100 mark for the first time on Friday, building on its 147% increase last year, driven by retail-investor flows and momentum-driven buying amidst a persistent tightness in physical markets for the metal.
