Gold reached an unprecedented high of $5,081.18 per ounce by 0323 GMT on Monday, driven by investor inflows into the safe-haven asset amidst escalating geopolitical tensions. The precious metal has seen a remarkable rise of over 64% in 2025, supported by factors such as sustained demand for gold from central banks and exchange-traded funds (ETFs), particularly notable during China’s fourteenth consecutive month of buying spree in December. Additionally, US monetary policy easing and robust central bank activity have bolstered the metal’s performance this year, which has seen prices increase by over 17%.
According to Kyle Rodda, a senior market analyst at Capital.com, the significant surge is attributed to investor confidence issues within the US administration and assets. This was triggered by President Donald Trump’s abrupt decision not to impose tariffs on European allies as leverage for Greenland, his threats against Canada for signing a trade deal with China, and his proposed 200% tariff on French wines and champagnes in an attempt to pressure Emmanuel Macron into joining the Board of Peace initiative. These erratic decisions have led some observers to fear a permanent disruption in international relations, potentially undermining the UN’s role as a primary platform for conflict resolution.
Rodda suggests that gold has become “the only alternative” amid this crisis of confidence in US administration and assets. The recent dollar weakness, driven by the yen’s rise and investor caution ahead of this week’s Federal Reserve meeting, further supports gold’s gains. A weaker dollar makes greenback-priced gold more affordable for those holding other currencies.
Analysts expect continued upward momentum for gold prices, with forecasts indicating that they may peak at around $5,500 later in the year. Periodic pullbacks are expected but will be met with strong buying interest, as suggested by Philip Newman, Metals Focus director.
In parallel to gold’s performance, silver also saw significant gains on Monday, reaching a record high of $109.44 per ounce after climbing above the $100 mark for the first time since its 2025 rally. This increase underscores retail investor flows and momentum-driven buying, which have compounded a period of tightness in physical markets. Spot platinum also saw notable growth, rising to a record high of $2,891.6 per ounce on Monday, while spot palladium hit a three-year peak at $2,075.30 per ounce.
Overall, the gold market is experiencing robust demand and positive momentum, with investors turning increasingly towards the precious metal as a safe-haven asset amid global uncertainties.