Gold hit a new record high of nearly $5,595 an ounce on Thursday, while silver prices have almost quadrupled since last April to over $118 an ounce. The extraordinary surge in precious metals is driven by US President Donald Trump's continued disruption of the global economy through aggressive policies, sparking a flight to traditional safe haven assets.
The rally accelerated dramatically this month. Gold prices have climbed more than a quarter in January alone and now stand at nearly double their level from a year ago. Silver has seen its most rapid run-up in the last month, surging from below $30 an ounce last April.
Trump's policies are fueling the precious metals boom. His punitive tariffs announced last April, threats against countries including Greenland and Iran, and public pressure on the Federal Reserve to cut interest rates have shaken global markets. The president launched a criminal case against Federal Reserve chair Jerome Powell and criticized him on social media after the Fed held rates on Wednesday, posting: «Even this moron admits that inflation is no longer a problem.»
Market Warning Signs
Analysts are sounding alarm bells about the rapid price movements. Giuseppe Sersale, strategist at Italy's Anthilia, described recent market moves as «parabolic» and said they have «all the hallmarks of a mania». The gold price dropped to $5,250 later Thursday, highlighting the volatility.
Daniela Hathorn, senior market analyst at Capital.com, sees deeper implications. «Gold and silver are reflecting more than short-term market stress; they are signalling a re-pricing of trust. Trust in currencies, in institutions, and in the stability of the post-cold war economic order,» she said.
Safe Haven Demand
Traditional safe haven demand is driving the surge. Louise Street, senior market analyst at the World Gold Council, noted that last year «consumers and investors alike bought and held gold in an environment where economic and geopolitical risks have become the new normal». She added: «Investment demand stole the show as investors raced to access gold through all available routes.»
Central banks bought 863 tonnes of gold in 2025, according to World Gold Council data released this week. While that figure was 21% lower than the previous year, the organization said «central bank buying remained a prominent and additive factor» in supporting demand. The Royal Mint is actively encouraging retail investors, urging them to «take the first step towards fortifying your financial future with the timeless allure of gold» on its website.
Dollar Under Pressure
The dollar has slumped to a four-year low against a basket of other currencies. Eszter Gárgyán of UniCredit wrote in a research note: «The dollar has come under renewed depreciation pressure since mid-January, as geopolitical risks, rising trade tensions and concerns regarding Fed independence have resurfaced.»
The euro broke through $1.20 on Tuesday before falling back modestly. The pound reached $1.38 on Thursday, up nearly five cents in a fortnight. When asked about the currency's weakness, Trump shrugged it off, saying: «No, I think it's great.» Treasury secretary Scott Bessent offered a different message, insisting: «We don't comment, other than to say we have a strong dollar policy.»
US stocks have remained resilient despite the turbulence. The S&P 500 rose 17.9% in 2025, driven largely by the "magnificent seven" tech companies and hopes of future interest rate cuts. Many analysts warn that current elevated share prices may indicate a bubble, echoing Chuck Prince's 2007 observation about investor behavior: «as long as the music is playing, you've got to get up and dance».
Note: This article was created with Artificial Intelligence (AI).
