Gold Hits $5,000 for First Time Amid Trump Policy Unrest
Gold prices surged to fresh records on Monday, crossing the $5,000-per-ounce mark for the first time as rising global uncertainty and policy moves by US President Donald Trump unsettled investors.
The precious metal climbed as high as $5,111.07 an ounce after breaching the psychological $5,000 level during Asian trading hours.
“It vaulted over the psychologically important 5,000 mark on a glittering streak, heading sharply higher as trade tensions emanating from the US unnerved investors,” said Susannah Streeter, chief investment strategist at Wealth Club.
“The dollar’s decline is part of the story,” she added, noting that the US currency weakened against the yen on Monday.
“The greenback has taken another hit as concerns continue to swirl (around) the impact of tariffs, high government spending and inflation on the US economy, prompting investors to recalibrate their exposure to the US.”
Silver also followed the rally, hitting an all-time high above $110 an ounce on Monday.
Although recent support for gold has come from turbulence surrounding Trump’s ambitions for Greenland and pressure on the US Federal Reserve, the metal has been on a strong upward trajectory for about two years.
Gold has repeatedly reached record highs on the back of strong central bank demand and persistently high inflation.
The metal traded at just above $2,000 an ounce in January 2024.
Its surge has also been driven by geopolitical tensions, including the wars in Ukraine and Gaza, as well as Washington’s intervention in Venezuela.
“Gold has not been marching higher because of daily drama,” said independent analyst Stephen Innes.
“It has been repriced because investors are slowly recalibrating what stability costs in a world drowning in debt.”
Analysts said fears of a fresh US government shutdown and Trump’s threat to impose 100 per cent tariffs on Canada if it signs a trade deal with China helped push gold to new records at the start of the week.
“Gold soared past the $5,000 mark for the first time, fuelled by its appeal as a safe-haven asset,” said Patrick Munnelly, a market strategist at Tickmill Group.
“The dollar took a hit against most major currencies as concerns grew over potential American intervention in Japan’s foreign exchange market, dampening sentiment toward the global reserve currency.”
Investors are also bracing for this week’s Federal Reserve policy meeting amid rising anxiety over the institution’s independence.
The concerns follow moves by US prosecutors targeting Federal Reserve chairman Jerome Powell, including subpoenas that analysts say could pave the way for a criminal indictment.
In response, the heads of major central banks have publicly backed the Federal Reserve and Powell.
Meanwhile, demand for gold continues to rise sharply.
The World Gold Council said gold demand by value jumped 44 per cent year on year to a record $146 billion in the third quarter of last year.
Strong interest has also been recorded through exchange-traded funds, which allow investors to gain exposure to gold without trading directly on the futures market.
AFP
Titilope Adako is a talented and intrepid journalist, dedicated to shedding light on the untold stories of Osun State and Nigeria. Through incisive reporting, she tackles a broad spectrum of topics, from politics and social justice to culture and entertainment, with a commitment to accuracy, empathy, and inspiring positive change.
