Gold has shattered records, surging past $5,000 per ounce amid escalating global uncertainty fueled by the U.S. President Donald Trump’s aggressive trade policies. On Saturday, Trump threatened a 100% tariff on Canada if it strikes a trade deal with China, rattling markets further.
As safe-haven assets, gold and other precious metals draw investors during turbulent times. Silver joined the frenzy on Friday, topping $100 an ounce for the first time and capping a nearly 150% gain last year.
Multiple forces are driving demand: stubborn inflation, a weakening U.S. dollar, aggressive central bank buying worldwide, and bets on more Federal Reserve rate cuts this year. Geopolitical flashpoints—wars in Ukraine and Gaza, plus Washington’s seizure of Venezuelan President Nicolás Maduro have supercharged gold’s appeal.
Gold’s allure stems partly from its scarcity. The World Gold Council reports that just 216,265 tonnes have ever been mined—enough to fill three or four Olympic-sized swimming pools. Most of that haul came post-1950, thanks to better mining tech and new deposits. The U.S. Geological Survey pegs remaining underground reserves at 64,000 tonnes, with supply likely to flatten soon.
“When you own gold, it’s not attached to the debt of somebody else like a bond is or an equity where the performance of a company will drive performance,” says Nicholas Frappell, global head of institutional markets at ABC Refinery. “It’s a really good diversifier in a very uncertain world.”
A Blockbuster 2025 and Beyond
Gold delivered its biggest annual gain since 1979 last year as investors fled to precious metals amid fears of Trump’s tariffs and overvalued AI stocks. “I think a large part of that is the extreme uncertainty we have around U.S. policy,” notes Nikos Kavlis of Metals Focus.
Gold thrives when rates fall, as bonds yield less and push capital toward non-yielding assets like bullion. With the Fed expected to slash its key rate twice this year, the rally persists. “It’s inversely correlated because the opportunity cost of keeping the money in a [government bond] is really not worth it anymore, so people go to gold,” explains Ahmad Assiri, research strategist at Pepperstone.
Central banks piled on last year, adding hundreds of tons to reserves per the World Gold Council. “There’s a very clear shift away from the U.S. dollar, which is benefiting gold immensely,” Kavlis adds.
The 2026 rally shows no signs of slowing, though Frappell cautions that positive surprises could trigger a pullback. “There’s got to be scope for unexpected news that actually might be positive for the world and not necessarily positive for gold.”
Cultural Demand Fuels Fire
Beyond investors, cultural traditions boost gold’s momentum. In India, Diwali prompts buys for luck and wealth; households hold $3.8 trillion in gold—88.8% of GDP—per Morgan Stanley. China, the top consumer market, sees spikes around Chinese New Year. “We often see a seasonal uptick in demand around Chinese New Year, which we are seeing at the moment to an extent,” Kavlis says, nodding to the upcoming Year of the Horse in February.
Story by: Mercy Addai Turkson #ahotoronline.com