Spot gold surged nearly 2% on Monday to a historic high of USD 4,690.79 per ounce, extending a powerful rally that has defined the start of 2026. Spot silver jumped 5% to a record USD 94.10 per ounce. Since the beginning of the year, gold and silver have gained about 6% and 18% respectively.
The immediate catalyst for the latest spike was renewed trade tension between the United States and Europe. After a plan by U.S. President Donald Trump to acquire Greenland was blocked, he threatened additional tariffs on the United Kingdom, Germany and France, stoking fears of an escalating transatlantic trade conflict.
Peel Hunt LLP analyst Peter Mallin-Jones said the move was “reminiscent of blackmail,” adding that the precious metals rally reflected capital flowing out of U.S. dollar assets and a growing demand to hedge against the potential inflationary impact of a trade war.
The latest geopolitical shock has injected fresh momentum into a record-breaking gold rally that has already lasted for a year. Citigroup analysts last week forecast that gold prices will reach USD 5,000 per ounce within three months, with silver expected to test USD 100. Aakash Doshi, head of gold strategy at State Street Investment Management, has significantly raised his estimate of the likelihood of such an outcome.
“The probability of gold reaching USD 5,000 over the next six to nine months is now close to 40%,” Doshi said in an interview. He argued that, despite elevated prices, the current market backdrop strengthens the case for holding gold. “When the S&P 500 Index is approaching 7,000 and gold is also hitting new highs, it actually makes me more confident about holding gold as a hedge,” he said. “It shows the market is increasingly focused on pricing tail risks.”
Beyond headline geopolitical risks, several structural forces are helping to underpin gold at higher levels. Investment demand remains robust, with global gold ETF holdings continuing to rise. Last week, ETFs added more than 28 tonnes of gold, the largest weekly increase since September of last year. A report from State Street Bank said that even under conservative assumptions, the current cycle of ETF accumulation still has “significant room” to run in 2026.
Central bank purchases are also providing a durable foundation for prices. Their buying has shown a “price inelastic” pattern, helping to support gold above USD 4,000 per ounce over the longer term. At the same time, macroeconomic uncertainty has become deeply entrenched. The World Economic Forum’s newly released Global Risks Report 2026 identifies geo-economic confrontation as the top risk for the year, with around 50% of respondents expecting the global environment over the next two years to be “turbulent or stormy.”
Linh Tran, senior market analyst at XS.com, said gold’s upside momentum is no longer tied merely to short-term economic cycles. Instead, it is being driven by a “strategic reassessment” of confidence in the global financial and policy framework. That shift, she suggested, is encouraging investors to view gold not just as a cyclical hedge, but as a core portfolio asset in an era of persistent systemic risk.
As to whether gold can hold its elevated levels and continue higher, Doshi believes the underlying uptrend remains resilient. “A few months of sideways consolidation would not damage the overall bullish thesis,” he said. “In fact, it may offer investors another opportunity to re-enter—after all, every pullback in recent months has been actively bought.”
He concluded that in an environment of high government debt, rising policy uncertainty and unstable correlations between equities and bonds, gold’s role as a low-volatility safe-haven asset is becoming increasingly important. With geopolitical conflicts and trade tensions remaining at the forefront of investors’ concerns, the financial attributes of gold are being reassessed through a new lens. The notion of gold at USD 5,000 per ounce has moved from a fringe call toward an emerging consensus view.
