Gold prices reached a historic milestone on Monday, surging past $5,000 an ounce for the first time as investors continued to pile into the precious metal amid mounting economic and geopolitical uncertainties. The gold price rally reflects a combination of factors including renewed trade tensions, concerns about currency debasement, and persistent safe-haven demand. According to market observers, the metal has gained approximately 87% since the start of 2025, marking one of its strongest bull runs in recent history.
The latest spike came as gold jumped more than 2% on Monday, driven by fresh market turbulence following renewed tariff threats from President Trump. The dollar index simultaneously fell nearly 1% against major currencies to around $96.96, further supporting the precious metal’s ascent.
Trade Tensions Fuel Safe-Haven Demand
President Trump’s weekend threat to impose 100% tariffs on Canada if the country pursues any trade agreement with China reignited market fears about global trade disruptions. Trump warned on Truth Social that Canada would face severe consequences if it attempted to become a conduit for Chinese goods entering the United States. These comments, combined with recent rhetoric about taking over Greenland, have sparked a return of the “Sell America” trade that has supported gold prices throughout the past year.
Additionally, the threatening posture toward traditional allies has prompted investors to seek shelter in assets perceived as stable stores of value. Gold has historically played this flight-to-safety role during periods of heightened economic uncertainty, and the current environment appears to be no exception.
Currency Debasement Concerns Drive Gold Prices Higher
The debasement trade has emerged as another significant factor supporting the gold price surge, according to market analysts. Investors are increasingly worried about the erosion of fiat currency values as governments pursue aggressive fiscal policies and accumulate mounting debt levels. Gold bulls argue that these dynamics make precious metals more attractive as stable alternatives to traditional safe havens like government bonds.
However, Trump’s ongoing pressure campaign against Federal Reserve Chair Jerome Powell has intensified these concerns in recent weeks. Market participants worry that political interference with monetary policy could lead to premature interest rate cuts and trigger a new inflationary cycle. Gold has long been considered an effective hedge against rising prices, making it particularly appealing in this environment.
Meanwhile, the debasement trade was a dominant market theme throughout 2025, and analysts have cited it as a key driver behind bullish gold price forecasts for 2026. The concern extends beyond US policies, as investors monitor fiscal developments across multiple major economies.
Central Bank Purchases Provide Sustained Support
According to Ben McMillan, Chief Investment Officer at IDX Advisors, global central bank buying has arguably been the biggest driver of gold’s outperformance in recent years. Central banks dramatically increased their gold purchases after the COVID-19 pandemic, with China leading the charge as monetary authorities doubled their annual acquisitions while simultaneously reducing Treasury holdings.
In contrast to previous decades, central banks have actively diversified their reserves away from US dollar-denominated assets. This trend accelerated following Russia’s invasion of Ukraine, when the United States froze Russia’s dollar reserves, prompting concerns about the weaponization of currency reserves and spurring additional gold buying from countries seeking to reduce dollar exposure.
Geopolitical Uncertainty Adds Premium to Gold
Heightened geopolitical risks continue to underpin gold’s safe-haven appeal as multiple global flashpoints simmer simultaneously. From Trump’s recent moves in Venezuela to the ongoing war in Ukraine, instability in Iran, and strains within the NATO alliance, investors face an unusually complex threat landscape. As these conflicts extend into 2026, analysts indicate they expect gold’s protective qualities to maintain strong demand for the precious metal.
Retail Investor FOMO Amplifies Rally
The fear of missing out may be contributing to gold’s parabolic ascent, with the metal gaining 25% since October alone. As Business Insider reported, retail traders have been pouring money into gold and silver recently, encouraged by discussion of the “Sell America” trade and a steady stream of bullish price predictions from market commentators.
Nevertheless, some market professionals have expressed concern that the flight to safety has itself become an investment bubble. Silver prices have climbed even faster than gold over the past year, leading some analysts to warn that investors chasing these rallies could face significant losses if sentiment shifts.
Market participants will be watching for any signs of cooling in central bank demand or resolution of trade tensions that could alter gold’s trajectory. However, with multiple supportive factors still in place, the near-term direction remains uncertain.
