Gold Breaks $5,000 Mark as Investors Flock to Safe Havens
Gold prices have surged past $5,000 (£3,659) an ounce for the first time on record, extending a powerful rally that has reshaped global commodity markets over the past year.
The precious metal’s latest milestone comes amid rising geopolitical and economic uncertainty, including fresh tensions between the United States and NATO over Greenland and renewed concerns about US trade policy. Over the weekend, President Donald Trump warned he could impose a 100% tariff on Canada if it enters into a trade agreement with China, unsettling financial markets.
Gold is widely viewed as a safe-haven asset, attracting investors during periods of instability. Its rise has been mirrored across the precious metals market, with silver also hitting a historic high of $100 an ounce on Friday, following sharp gains in 2025.
A combination of factors has driven demand for gold, including persistently high inflation, a weakening US dollar, and sustained buying by central banks. Expectations that the US Federal Reserve will cut interest rates again this year have further boosted its appeal, as lower rates tend to reduce returns on assets like bonds.
Ongoing conflicts in Ukraine and Gaza, along with heightened political developments involving Venezuela, have also contributed to the rally, reinforcing gold’s reputation as a hedge against global risk.
Part of gold’s enduring value lies in its scarcity. According to the World Gold Council, around 216,000 tonnes of gold have been mined throughout history—enough to fill just a handful of Olympic-sized swimming pools. While underground reserves remain, the US Geological Survey estimates that future supply growth is likely to slow as production reaches a plateau.
Market analysts say gold’s independence from debt markets adds to its attraction. Unlike bonds or equities, its value is not tied to the financial performance of a government or company, making it a useful diversifier during volatile periods.
Gold recorded its strongest annual performance in decades last year, posting its biggest gain since 1979. Investors have increasingly turned to the metal amid concerns over trade disputes, policy uncertainty in Washington, and fears that technology and AI-related stocks may be overvalued.
Expectations of interest rate cuts have also played a role. When yields on government bonds fall, the opportunity cost of holding non-interest-bearing assets like gold decreases, prompting investors to shift their capital.
Central banks have been major contributors to demand, adding hundreds of tonnes of bullion to their reserves over the past year. Analysts say this reflects a gradual move away from reliance on the US dollar.
Despite the strong momentum, some market watchers caution that gold’s rally remains sensitive to headlines. Any unexpected easing of geopolitical tensions or improvement in economic conditions could weigh on prices.
Beyond investment, gold continues to hold cultural and traditional significance. In countries such as India and China, it is commonly bought during festivals, weddings, and other celebrations, reinforcing steady demand. India alone is estimated to hold trillions of dollars’ worth of gold in household reserves, while China remains the world’s largest consumer market for the metal.
For now, gold’s ascent reflects a world grappling with uncertainty—one in which investors, institutions, and households alike are turning to the oldest store of value for reassurance.
