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Gold has crossed the $5,000-an-ounce mark for the first time, extending a remarkable rally that has reshaped the precious metal's place in global markets. The move caps a year in which prices surged by more than 60%, driven by a mix of geopolitical strain, economic anxiety and changing investor behaviour.
The latest jump comes against a backdrop of heightened political tension, including friction between the United States and its allies over Greenland, as well as renewed trade threats from Washington. President Donald Trump's warning of steep tariffs on Canada if it deepens ties with China has added to market unease, reinforcing gold's appeal as a shelter in turbulent times.
Gold, alongside other precious metals, is often viewed as a safe haven when confidence in currencies and financial assets weakens. Silver also joined the rally, climbing above $100 an ounce for the first time after strong gains last year. Analysts say persistent inflation, a softer US dollar and expectations of interest rate cuts have all supported demand.
Central bank buying has been another powerful force. Monetary authorities across the world added large amounts of bullion to their reserves last year, a trend widely seen as a move to reduce reliance on the US dollar. With the Federal Reserve expected to lower rates again this year, the opportunity cost of holding non-yielding assets like gold has fallen further.
Scarcity also underpins gold's long-term allure. Roughly 216,000 tonnes have been mined in total, enough to fill only a handful of Olympic-sized swimming pools. While underground reserves remain, production growth is expected to slow as accessible deposits are exhausted.
Beyond investment, cultural demand continues to play a role. In countries such as India and China, gold is closely tied to tradition, wealth and celebration. Indian households alone are estimated to hold trillions of dollars' worth of the metal.
Despite the momentum, some analysts caution that gold's ascent is heavily news-driven. Unexpected easing of global tensions or stronger economic confidence could cool prices in coming months ahead.
