Gold surges past $5,000 as geopolitical tensions fuel demand
What's the story
Gold has hit a record high of over $5,000 per ounce for the first time ever. The surge comes amid rising geopolitical tensions and a weakening US dollar. The precious metal's price jumped by more than 8% last week alone. A major indicator of the US currency also recorded its biggest weekly fall since May, making gold cheaper for many investors across the globe.
Market trends
Gold's historic rally and silver's record high
Gold has more than doubled in value over the last two years, underscoring its traditional role as a barometer of market fear. The metal has gained over 15% this year alone, mainly due to investors fleeing from currencies and Treasuries. Meanwhile, silver also hit a new high after crossing the $100 mark in the previous session.
Investor sentiment
Trump's policies and rising debt boost gold's appeal
US President Donald Trump's policies have also contributed to gold's appeal as a safe-haven asset. His attacks on the Federal Reserve's independence, threats to annex Greenland, and military intervention in Venezuela have all spooked markets. Further, rising public debt in advanced economies is another factor driving investors toward gold. Some long-term investors believe inflation will be the only way for states to become solvent and are buying gold to protect their purchasing power.
Future prospects
Investors await Trump's choice for next Fed chair
Investors are now looking forward to Trump's choice for the next Federal Reserve chair. A more dovish chair could fuel expectations of further interest rate cuts this year, which would be beneficial for non-yielding bullion.