FX.co ★ Gold tops $5,000 as global tensions rise

On Monday, gold prices surpassed the psychological barrier of $5,000 per ounce for the first time, continuing their rapid ascent amid heightened demand for safe-haven assets caused by escalating geopolitical tensions.

Spot gold prices rose by 1.1%, reaching a new all-time high of $5,035.83 per ounce. US gold futures also added 1.1%, climbing to a record $5,074.71 per ounce.

The rally gained momentum last week when gold prices surged by more than 8%, repeatedly setting new historical highs. Since the beginning of the year, the metal has gained nearly 17%, firmly cementing its status as the primary beneficiary of global uncertainty.

Other precious metals also traded higher. Silver added more than 2%, reaching an all-time high of $106.56 per ounce. Meanwhile, platinum hit a new record of $2,798.46 per ounce.

The price surge is supported by a combination of geopolitical risks, expectations of US monetary policy easing later in 2026, and sustained demand from central banks and investors seeking to shield themselves from market volatility.

A key driver of growth this month has been the escalation of tensions between the United States and its NATO allies over Greenland, which has added to global market anxiety.

US President Donald Trump’s rhetoric about Washington’s strategic interests in the Arctic has intensified transatlantic frictions, raising concerns about broader diplomatic and economic repercussions.

Trump’s trade comments directed at Canada are an additional source of worry. Over the weekend, he threatened to impose 100% tariffs on Canadian goods if Ottawa continues its trade agreement with China. According to the US president, Canada could be used as a “shipping port” for Chinese goods, and China, in his words, would “eat Canada alive.”

Demand for gold also comes from expectations regarding US monetary policy. The Federal Reserve is set to conclude its meeting on Wednesday, and markets almost unanimously expect interest rates to remain unchanged.

Although a pause in rate changes has largely been priced in, investors will closely scrutinize the Fed’s statement and comments from Chairman Jerome Powell for signals regarding the timing and pace of any potential rate cuts later this year. Lower rates traditionally support gold by reducing the opportunity cost of holding non-yielding assets.

“Both the data and Chair Powell’s robust defence of central bank independence indicate little prospect of a 28 January Fed rate cut,” analysts at ING noted.

According to the think tank, the market will focus mainly on Trump’s upcoming nomination of a new Fed chair, fresh macroeconomic data, and whether the future candidate can persuade the committee to adopt a more aggressive easing policy.