- Gold prices have surpassed $5,000 an ounce amid rising economic and geopolitical risks.
- Tariff threats, inflation, government debt levels, and central bank buying have driven the surge.
- Gold is up 87% since the start of 2025.
Gold is surging yet again, with the metal touching $5,000 an ounce on Monday for the first time ever.
Behind the latest rally is the familiar cocktail of tailwinds that are bullish for gold, but less so for other parts of the market and the economy. The "sell America" trade is still getting a boost, inflationary concerns linger, and fears about geopolitical crises continue to percolate.
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Here are the latest updates on what's driving gold's parabolic rally to all-time highs.
Trump's latest tariff threats
Gold jumped more than 2% on Monday as trade tensions roil markets once again after Trump threatened to impose 100% tariffs on Canada if it strikes any sort of trade agreement with China.
"If Governor Carney thinks he is going to make Canada a 'Drop Off Port' for China to send goods and products into the United States, he is sorely mistaken," Trump wrote on Truth Social over the weekend.
Gold tends to play a "flight-to-safety" role in markets. When investors get scared about the economic consequences of Trump upending trade with key allies, they've often flocked to the metal for shelter.
The threatening rhetoric against allies like Canada and last week's sabre-rattling from Trump about taking over Greenland sparked a return of the "Sell America" trade, which has boosted gold over the last year.
As gold spiked to fresh highs on Monday, the dollar index fell almost 1% against major rivals to about $96.96.
The debasement trade
Occupying a similar place in investors' minds to "Sell America" is the debasement trade, which continues to boost metals like gold as markets fret about other safe havens such as Treasurys.
Gold bulls say that a weakening of the US dollar and other fiat currencies as governments pursue aggressive fiscal policies will boost more stable stores of value.
Trump's ongoing pressure campaign against the Fed and Jerome Powell has been the latest update that has investors fretting over currency debasement and flocking to gold. The thinking is that political meddling with monetary policy and a dovish new Fed chair could lead to lower interest rates and spur a new period of inflation down the road. Gold has long been considered a hedge against rising prices among investors.
The debasement trade was a dominant theme in markets in 2025, and analysts have eyed it as a driver of bullish forecasts for 2026.
Central bank buying
According to Ben McMillan, the CIO at IDX advisors, arguably the biggest driver in gold's outperformance over the last few years has been global central bank buying.
"After COVID, when America printed all this money, central banks — and it was led by China — quite literally doubled their annual purchases of gold, and they were selling Treasurys to do so," McMillan told Business Insider.
Central banks have also been trying to diversify their holdings away from US dollars, a trend that accelerated after Russia's invasion of Ukraine. That prompted the US to freeze Russia's dollar reserves, drawing criticism over "weaponization" of the dollar and sparking more gold buying from countries like China.
Geopolitical risks
Heightened uncertainty is the heart of gold's bull case for many investors, and the geopolitical outlook looks shakier than it has in a long time.
From Trump's moves in Venezuela, the ongoing war in Ukraine, turmoil in Iran, and a strained NATO alliance, gold bugs have a lot to worry about these days. As current conflicts stretch into 2026, analysts say they expect gold's safe-haven status to keep surging.
FOMO
Finally, the fear of missing out on a meme-like rally might be behind some of the moves. Gold is up 87% since the start of 2025, and has spiked 25% since October.
The gains are too good for some to watch from the sidelines.
As Business Insider reported, retail traders have been pouring money into gold recently, egged on by talk of the "Sell America" trade and an endless parade of bulls who say precious metals will keep rising.
Silver is up even more than gold in the last year, and market pros told Business Insider that they worry the flight to safety itself has become a major investment bubble that could end badly for investors chasing the rally.
The post The 5 forces behind gold's stunning rally to its latest record above $5,000 appeared first on Business Insider
