Gold tops US$5,000 as global upheaval fuels precious metals rally

[SINGAPORE] Gold surged beyond US$5,000 an ounce for the first time, extending a breakneck rally fuelled by US President Donald Trump’s reshaping of international relations and investor flight from sovereign bonds and currencies.

Bullion climbed around 2 per cent to above US$5,085 as US dollar weakness reinforced demand. A gauge of the US currency has fallen almost 2 per cent in six sessions, with speculation that the US may assist Japan in efforts to boost the yen adding to worries over Federal Reserve independence and Trump’s erratic policymaking.

Silver also advanced more than 5 per cent to a record high, having crossed US$100 an ounce in the previous session in a rally supported by strong demand from retail buyers from Shanghai to Istanbul.

Gold’s dramatic gains, the metal has more than doubled over the last two years, drives home bullion’s historic role as a gauge of fear in markets. Fresh from its best annual performance since 1979, it’s risen more than 17 per cent so far this year due largely to the so-called debasement trade, whereby investors retreat from currencies and Treasuries.

A massive sell-off in the Japanese bond market last week is the latest example of investors rejecting heavy fiscal spending.

In recent weeks, the Trump administration’s actions, attacks on the Fed, threats to annexe Greenland, military intervention in Venezuela, have spooked markets. For investors looking to navigate this uncertainty, the haven appeal of gold has rarely been more attractive.

“Gold is the inverse of confidence,” said Max Belmont, a portfolio manager at First Eagle Investment Management. “It’s a hedge against unexpected bouts of inflation, unanticipated drawdowns in the market, flare-ups in geopolitical risk.”

Over the weekend, Trump threatened Canada with 100 per cent tariffs on all its exports to the US if Ottawa makes a trade deal with China, escalating bilateral tensions.

Meanwhile, political uncertainties within the US remain high as Senate Democratic leader Chuck Schumer vowed to block a massive spending package unless Republicans strip funding for the Department of Homeland Security, increasing the risk of a partial government shutdown.

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Swelling public debt in advanced economies has become another key pillar of gold’s rally. Some long-term investors, convinced that inflation will become the only path to state solvency, have piled into gold as a way to preserve purchasing power.

“People have become a lot more worried about the long-term debt trajectory over the past three years,” said John Reade, chief strategist at the World Gold Council. “The place that I have found the debasement and debt arguments come through the most has been with family offices. They are thinking about generational wealth protection, rather than the short term.”

This debasement trade reached its zenith in late 2025, when prominent investors such as Citadel Securities chief executive officer Ken Griffin and Bridgewater Associates Founder Ray Dalio pointed to gold’s rise as a warning signal.

Investors are now waiting for Trump’s pick for the next Fed chair after the US president said that he has finished interviewing candidates, reiterating that he has someone in mind for the job. A more dovish chair would increase bets on further interest-rate cuts this year, a positive for non-yielding bullion, after three successive reductions.

“Many of the current Trump-induced geopolitical uncertainties are unlikely to go away anytime soon,” said Vasu Menon, managing director of investment strategy at OCBC. That means “gold could remain in play in the coming months and even years, although investors must brace for intermittent pullbacks after the strong gains in the past 12 months”.

Gold rose 1.7 per cent to US$5,072.80 an ounce as at 10.10 am in Singapore. Silver advanced 4.2 per cent to US$107.49. Platinum climbed to a record high and palladium also rose. The Bloomberg Dollar Spot Index was down 0.4 per cent after losing 1.6 per cent last week. BLOOMBERG