Gold hits $5,100 barrier on rising global uncertainty

Gold prices climbed to a historic high above $5,100 per ounce on Monday, extending a strong rally as investors sought refuge in the precious metal amid escalating geopolitical and economic uncertainties.

Spot gold rose by 2.2 per cent to $5,089.78 per ounce as of 0656 GMT, after earlier touching an all-time peak of $5,110.50. U.S. gold futures for February delivery also gained 2.2 per cent to trade at $5,086.30 per ounce.

The precious metal recorded a remarkable 64 per cent gain in 2025, its strongest annual performance since 1979. The surge has been driven by heightened safe-haven demand, easing U.S. monetary policy, sustained central bank purchases and strong inflows into exchange-traded funds. China, in particular, extended its gold buying streak for the fourteenth consecutive month in December.

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Gold prices have posted successive record highs over the past week and are already up more than 18 per cent this year, reinforcing expectations of further gains in 2026.

Market analysts attribute the latest rally to growing investor unease over political developments in the United States. Kyle Rodda, senior market analyst at Capital.com, said confidence in U.S. leadership and assets has been shaken by recent policy reversals and unpredictable decisions.

U.S. President Donald Trump recently stepped back from threats to impose tariffs on European allies as leverage in negotiations involving Greenland. Over the weekend, he also warned of a 100 per cent tariff on Canada if it proceeds with a trade agreement with China.

In addition, Trump threatened to impose 200 per cent tariffs on French wines and champagnes, a move seen by analysts as pressure on French President Emmanuel Macron to join his proposed Board of Peace initiative. Critics have expressed concerns that the initiative could weaken the United Nations’ role in global conflict resolution, although Trump has said the board would work alongside the UN.

According to Rodda, the uncertainty surrounding U.S. policy has prompted investors to turn to gold as a reliable store of value.

Meanwhile, a strengthening Japanese yen weighed on the U.S. dollar, which fell broadly on Monday. Investors trimmed dollar holdings ahead of this week’s Federal Reserve meeting, further supporting gold prices, as a weaker dollar makes the metal cheaper for buyers using other currencies.

Analysts remain bullish on gold’s outlook, with expectations that prices could approach $6,000 per ounce later this year amid persistent global tensions and sustained demand from central banks and retail investors.

Philip Newman, director at Metals Focus, said prices could peak around $5,500 later in the year, although short-term pullbacks may occur as investors take profits. He noted that any corrections are likely to be brief, supported by strong buying interest.

Other precious metals also posted strong gains. Spot silver jumped 4.8 per cent to $107.90 per ounce after reaching a record high of $109.44. Platinum rose 3.4 per cent to $2,861.91 after hitting a fresh peak earlier in the session, while palladium gained 2.5 per cent to $2,060.70, its highest level in more than three years.

Silver crossed the $100 mark for the first time on Friday, building on a 147 per cent rise last year, supported by strong retail demand and tight physical supply.

(Reuters)