Gold just hit a record US$5,000. What’s driving the surge?

A one-kilogram, right, and 500-gram gold bar displayed at an ABC Bullion store in Sydney, Australia, on Friday. (Brendon Thorne/Bloomberg/Getty Images via CNN Newsource)

Gold prices surged beyond US$5,000 per ounce for the first time late Sunday, as investors rushed to the safe-haven asset as concern spread that U.S. President Donald Trump is upending relations with key allies, from Europe to Canada.

In this year’s first 26 days, the price of gold has jumped 15 per cent; a historic rally that builds on a record-breaking year in 2025, when prices skyrocketed 65 per cent – the largest annual gain since 1979.

Gold is often seen as a refuge in uncertain times and a barometer of market anxiety. And this latest surge has been driven by a series of market-destabilizing global and domestic moves by Trump –– from the now-revoked tariff threats against NATO allies over Greenland, to the military operation against Venezuela, and the criminal investigation into Federal Reserve Chair Jerome Powell.

Demand has also been driven by a weaker U.S. dollar, higher-than-expected inflation, predictions the Fed will further cut interest rates this year, and the purchase of the precious metal by central banks around the world.

Gold was up 1.4 per cent Sunday to $5,058 a troy ounce, as of 8:14 pm ET.

Silver, another safe-haven asset surging in value, rose 4.5 per cent to $107.8 an ounce Sunday. Like Gold, Silver last year also recorded its best performance since 1979, with a 141 per cent price increase.

Despite hitting the $5,000 benchmark, analysts remained largely bullish on gold, arguing prices could rise further as uncertainty persists.

Before the record rally, Goldman Sachs analysts had raised their forecasts of gold prices to $5,400 per troy ounce, citing private sector investors’ interests in the yellow metal due to “lingering global policy uncertainty,” according to a research note published by the investment bank last week.

Others saw even more room for gains. Bank of America’s chief investment officer Michael Hartnett said in a research note last week that gold prices could peak above $6,000.

Uncertainty drives boom

Less than one month into 2026, Trump’s policy whiplash has fueled geopolitical uncertainty and rattled markets, pushing investors to bet on precious metals.

Gold prices jumped following the U.S. capture of Venezuelan President Nicolás Maduro and Trump’s threat against the Iranian regime amid a bloody crackdown on protesters.

Trump also ramped up his rhetoric about annexing Greenland and threatened to reigniting a global trade war with tariffs on European allies that opposed his plans of acquiring the Danish territory. Even though Trump abruptly backed down and claimed a deal was reached on Wednesday, markets remained unsettled by the White House’s unpredictability.

Then on Saturday, Trump threatened to slap 100 per cent tariffs on Canadian imports should the U.S. neighbor make a trade deal with China – something Ottawa has said it has “no intention” of doing.

Domestically, the U.S. President has also renewed attacks on Powell, the Fed chair. Federal prosecutors opened a criminal investigation into him earlier this month, throwing into question the political independence of the central bank.

Together, these developments have unnerved investors, accelerating a flight into precious metals.