Gold surges past $5,000 as Trump policies fuel global uncertainty

Gold prices soared above the $5,000-an-ounce mark on Sunday, setting a new record as investors rushed into the safe-haven asset amid growing global uncertainty linked to US President Donald Trump’s policies.

The precious metal climbed to $5,026 an ounce, while silver also hit uncharted territory, breaking through $102 an ounce for the first time on Friday.

Gold’s latest surge comes on top of a strong rally over the past two years, driven by a combination of a weaker dollar, sustained buying by central banks and persistently high inflation. In January 2024, gold was trading just above $2,000 an ounce.

Recent gains have been underpinned by geopolitical tensions, including the wars in Ukraine and Gaza, as well as Washington’s intervention in Venezuela. Market anxiety has intensified in recent days following Trump’s statements on Greenland and renewed pressure on the US Federal Reserve.

“Over the past few days, gold's price action has been textbook safe-haven behaviour,” said Fawad Razaqzada, market analyst at Forex.com. “Underlying demand for protection is still there. Confidence in the dollar and bonds look a bit shaky.”

Trump last week retreated from proposed tariffs on several European countries after they opposed Washington’s attempts to seize control of mineral-rich Greenland. However, the comments sparked a sharp transatlantic diplomatic crisis, reviving fears of a trade war and undermining confidence in US investments.

The dollar slid to a four-month low against the euro as gold prices surged. “Gold pressed on to a fresh record high as geopolitical tensions remain elevated,” said Neil Wilson, investor strategist at Saxo UK.

While markets had not priced in the risk of US military action in Greenland, Wilson noted that fears of an escalating trade war were weighing heavily on investors.

Danish Prime Minister Mette Frederiksen traveled to Greenland’s capital on Friday for talks with the territory’s leadership, as diplomatic efforts intensified.

Investors are also bracing for this week’s Federal Reserve policy meeting, which follows moves by US prosecutors against Fed Chair Jerome Powell. The action has raised concerns about the central bank’s independence, particularly given Trump’s repeated criticism of Powell and his claims that inflation no longer exists.

Major central bank leaders publicly backed the Fed and Powell last week after prosecutors issued subpoenas that could lead to a criminal indictment.

“Add in lingering doubts around central bank independence and you are left with a slow-burning support base for gold,” said independent analyst Stephen Innes.

According to the World Gold Council, global gold demand by value jumped 44 percent year-on-year to a record $146 billion in the third quarter of last year. Demand has also been strong through exchange-traded funds, which allow investors to gain exposure to gold without trading futures directly.