By our Foreign Desk
LONDON — Gold prices surged past $5,000 per ounce for the first time on Monday, as a “perfect storm” of fiscal instability in the US and escalating geopolitical tensions drove investors toward the safety of the precious metal.
The spot price of gold hit a peak of $5,102 in early trading, marking a psychological and technical milestone that few analysts expected to see so early in 2026.
The breach of the $5,000 level follows a period of intense volatility in global markets, underscored by a weakening US dollar and heightening concerns over sovereign debt levels.
”We are seeing a fundamental repricing of risk,” said one senior commodities strategist. “Gold is no longer just a tactical play; it is being treated as a portfolio anchor in an era where traditional fiat hedges are under significant pressure.”
The rally is a continuation of a historic bull run. In 2025, gold recorded an annual gain of approximately 64 per cent, its strongest performance since 1979. This momentum has showed no signs of cooling in the new year, with prices already up more than 15 per cent since January 1.
Market participants pointed to several converging factors driving the ascent:
Geopolitical Friction: Renewed trade uncertainties and friction between major powers have kept a high “risk premium” baked into metal prices.
Central Bank Accumulation: Emerging market central banks have continued to diversify away from the dollar, with record purchases reported throughout the final quarter of 2025.
US Fiscal Concerns: Impending deadlines for US government funding and debates over the debt ceiling have rattled bond markets, making non-yielding gold more attractive.
The speed of the move has caught many by surprise. While Goldman Sachs recently raised its year-end 2026 forecast to $5,400, the crossing of the $5,000 mark on January 26 suggests that the “safe-haven” bid is currently outweighing any downward pressure from high interest rates.
As the metal enters uncharted territory, attention now shifts to whether retail demand—which surged in 2025 through gold-backed ETFs and physical sales—will maintain its pace at these record valuations.
Background: The Road to $5,000
The current rally is rooted in the structural shifts of 2025. Last year’s 64 per cent gain eclipsed the double-digit returns seen during the pandemic and the 2008 financial crisis, drawing comparisons to the inflationary spiral of the late 1970s.
Historically, gold’s previous significant peak was in 1980, when prices reached approximately $850 (roughly $3,400 in inflation-adjusted 2025 dollars).
By breaching $5,000 in nominal terms, the metal has not only broken its all-time nominal record but has also surpassed its historical inflation-adjusted peak, signaling a deep-seated anxiety about the long-term stability of the global financial system.
