The price of gold has surged above $5,000 an ounce for the first time, as political chaos surrounding US President Donald Trump drives investors towards the precious metal. Gold hit a record $5,100 on Monday before settling at $5,091, up 2.2% on the day, amid threats of 100% tariffs on Canada, a stand-off with Europe over Greenland, and rising fears of a US government shutdown.
Since Trump’s second inauguration just over a year ago, gold has soared by nearly 90%, reflecting growing unease over erratic policy shifts. Independent analyst Ross Norman said there had been a “vapourising of trust”, prompting a move away from dollar assets. “The only certainty at the moment seems to be uncertainty, and that’s playing very much into gold’s hands,” he said, predicting a peak of $6,400 an ounce this year.
Steve Miller, an investment strategist at GSFM, described the rally as the most spectacular in his four decades in markets, comparing it to the late 1970s oil shock. Anxiety has been compounded by Japan’s new prime minister, Sanae Takaichi, who has pledged tax cuts, including suspending the 8% consumption tax on food, to tackle spiralling costs. Investors fear her unfunded spending spree could mirror Liz Truss’s disastrous 2022 mini-budget, given Japan’s $9 trillion debt.
Gold’s rise has also been bolstered by expectations that the Trump administration may seek a weaker dollar to revive domestic manufacturing. The US currency lost nearly 10% of its value last year, and market speculation that the Federal Reserve is buying yen to weaken the dollar further has burnished gold’s appeal as a store of value. The Fed is expected to hold interest rates steady this week but may accelerate cuts later in 2026.
