Gold Surges Past US$5,100 as Investors Seek Safe Haven

Gold prices reached a significant milestone yesterday, surpassing US$5,100 per ounce for the first time, driven by escalating geopolitical tensions and a decline in confidence toward US assets. As investors flocked to the precious metal, spot gold rose by 2.2 percent, reaching US$5,089.78 per ounce by 06:56 GMT, after hitting an all-time high of US$5,110.50 earlier in the day.

The surge in gold prices follows a remarkable trend that has seen the metal gain 64 percent in value over the past year, marking its largest annual increase since 1979. Several factors contributed to this unprecedented rise, including a shift in US monetary policy, robust purchases by central banks, particularly China’s continuous buying streak for 14 months, and substantial inflows into exchange-traded funds.

Analysts attribute the latest spike in gold prices to a “crisis of confidence” in the current US administration, particularly following a series of unpredictable decisions made by President Donald Trump. Last Wednesday, Trump backtracked on threats to impose tariffs on European allies to leverage a claim on Greenland. Over the weekend, he announced potential 100 percent tariffs on Canada should it proceed with a trade agreement with China. Additionally, Trump threatened substantial tariffs on French wines and champagnes, seemingly to pressure French President Emmanuel Macron regarding his initiative for a “Board of Peace,” which some argue could diminish the United Nations’ role in global conflict resolution.

Kyle Rodda, a senior market analyst at Capital.com, stated, “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.”

As gold prices climbed, the US dollar weakened, partly due to a rising yen. Markets are currently on alert for potential interventions in the currency to stabilize the dollar. A weaker dollar enhances gold’s appeal for international buyers, as it makes the metal more affordable for those holding other currencies.

Looking ahead, analysts predict that gold prices may continue to rise, possibly reaching as high as US$6,000 this year due to increasing global tensions and strong demand from central banks and retail investors. Philip Newman, director of Metals Focus, expressed optimism, stating, “We expect further upside for gold. Our current forecast suggests that prices will peak at around US$5,500 later this year.” He cautioned that while periodic price pullbacks may occur as investors take profits, strong buying interest will likely follow each correction.

In addition to gold, other precious metals also experienced significant gains. Spot silver jumped 4.8 percent to US$107.903, after reaching a record of US$109.44. Spot platinum rose 3.4 percent to US$2,861.91 per ounce, following an earlier peak of US$2,891.60, while spot palladium increased by 2.5 percent to US$2,060.70, hitting its highest level in over three years.

Silver’s recent climb above the US$100 mark marks a continuation of its impressive 147 percent rise last year, fueled by retail investment and ongoing demand in physical markets. As geopolitical uncertainties persist, the appeal of precious metals as safe-haven assets appears likely to grow, influencing market dynamics in the months ahead.