Gold prices have been hitting record highs every day, with experts now seeing the $5,000 per ounce level knocking on the door.
On Tuesday, gold soared past $4,700 an ounce for the first time, while silver hit a record high of $95.770 an ounce. This surge in both metals was driven by a renewed flight to safety amidst escalating global tensions.
Fuelling fears of a renewed trade war, US President Donald Trump threatened to impose escalating tariffs on eight European countries starting February 1.
This threat would continue until the US is permitted to purchase Greenland.
Record rally and geopolitical drivers
Gold’s price has surged by an unprecedented 70% since the commencement of Trump’s second term a year ago, with a further 9.6% gain achieved within the first 20 days of 2026 alone.
This substantial rally has been primarily fueled by escalating geopolitical tensions.
Additionally, expectations of a shift towards easier monetary policy, coupled with robust central bank purchases and significant inflows into Exchange-Traded Funds (ETFs), have been key contributors to this remarkable rise.
“The US president’s latest escalation against NATO allies is likely to further shake market participants’ confidence in the US dollar as a safe haven and drive them to other safe havens,” Carsten Fritsch, commodity analyst at Commerzbank AG, said.
The ultimate safe haven is gold, which is largely immune to the influence of politicians and central banks.
While gold prices are high, investors should anticipate some market fluctuations.
Safe haven demand and $5,000 prospect
However, Aakash Doshi, head of gold strategy at State Street Investment Management, asserted that the underlying upward trend is strong.
Doshi believes the possibility of gold reaching a price of $5,000 per ounce in 2026 is a significant and realistic prospect.
“A few days of profit-taking or even a month of consolidation doesn’t change the real upward trend,” Doshi was quoted as saying in a Kitco report.
The probability of $5,000 gold over the next six to nine months is now north of 30%—closer to 40%.
The current environment, where both gold and US stocks are achieving near-record nominal values, strengthens gold’s position as a portfolio hedge, according to Doshi, rather than diminishing it.
He expressed less concern about gold’s value in this scenario, stating, “If the S&P 500 had rolled over and gold was at $4,500, I’d be more concerned.”
Instead, the simultaneous record highs—equities near 7,000 and gold also at a peak—increase his conviction in maintaining gold holdings.
Doshi suggests that gold’s current strength is driven by a market focus on “tail risks” rather than conventional narratives tied to interest rates.
Portfolio hedge and silver boost
This is supported by ongoing instability in stock-bond correlations and heightened geopolitical and policy uncertainty globally.
In this environment, the function of gold as a low-volatility hedge gains particular importance.
“Gold’s rally since the new year is a complete vindication for the bulls, and a slap in the face for those (like me) who have continually warned that the metal required more of a pullback and consolidation before it could push up to fresh highs,” said David Morrison, senior market analyst at Trade Nation.
Of course, the higher it goes, the bigger the possibility of a large downside correction.
Silver’s overnight rally, while unusually subdued compared to gold’s, was significant enough to propel it to a new record high, surpassing $95 per ounce—a move ten times more pronounced than the equivalent for gold.
Geopolitical uncertainty has driven up demand for silver and gold, accelerating their near-parabolic upward trend. With recent US dollar weakness, these metals have become the preferred safe havens for investors.
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