Gold prices have made a remarkable leap, surpassing US$5,000 (AU$7,233) per ounce on Monday, following silver’s unprecedented rise beyond US$100 (AU$144) per ounce just last Friday. This surge marks new heights in the precious metals market, driven by investors seeking the security of safe-haven assets amidst escalating geopolitical tensions.

This latest uptick in gold prices is part of a broader historic rally. Investors have increasingly turned to gold as a stable store of value, especially in times of uncertainty. The year 2025 saw a significant 64% increase in gold’s value, buoyed by persistent demand for safe investments, a loosening of U.S. monetary policy, and substantial gains in exchange-traded fund inflows.

Adding to the upward momentum, China continued its aggressive gold acquisition strategy, extending its buying spree into a 14th consecutive month by December. This persistent demand from one of the world’s largest economies has played a crucial role in driving gold prices higher.

Kyle Rodda, a senior market analyst at Capital.com, commented on the situation, pointing to a crisis of confidence in the U.S. administration and its assets. This crisis was sparked by some erratic decision-making from the Trump administration, which has further fueled the flight to gold as a reliable investment.

“[The latest catalyst] is effectively this crisis of confidence in the US administration and US assets, that was set off by some of the erratic decision-making from the Trump administration last week,” Kyle Rodda, senior market analyst at Capital.com, said.

“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.”

Over the past week, Donald Trump has announced swift policy changes, including abruptly stepping back on plans to seize Greenland, threatening to impose a 100 per cent tariff on Canada over its trade deal with China, and a 200 per cent tariff on French wines to pressure France to join the US president’s Board of Peace initiative.

Silver also hit a record of US$108.60 ($157.10) per ounce last Friday, building on its 147 per cent rise last year. This was driven by strong investment demand and a persistent supply shortage in the market.

More gains on the way

Metals Focus director Philip Newman predicted the price of gold will continue to grow in the wake of the fresh record.

“Our current forecast suggests that prices will peak at around US$5,500 ($7,952) later this year,” Newman said.

“Periodic pullbacks are likely as investors take profits, but we expect each correction to be short-lived and met with strong buying interest.”

Ross Norman, an independent analysis, predicts gold could reach a high of US$6,400 ($9,257) an ounce this year, with an average of US$5,375 ($7,774).

Meanwhile, the Japanese yen rose and the US dollar slipped early on Monday, with investors cautious ahead of this week’s US Federal Reserve meeting.

A weaker US dollar makes greenback-priced gold more affordable for holders of other currencies.

— With reporting by the Reuters news agency.

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