On Monday, spot gold rose nearly 2 percent to $5,081.18 per ounce. Silver also hit a record high on Friday, breaking above $100 an ounce for the first time after gaining almost 150 percent last year.
Gold had already climbed 65 percent in 2025, marking its strongest annual performance since 1979. In the first 26 days of 2026 alone, prices have jumped between 15 and 17 percent.
Analysts say the rally reflects growing market anxiety as investors seek safe-haven assets during periods of geopolitical tension and economic instability. Gold is increasingly being viewed not only as a hedge against inflation but also as protection against political and strategic risks.
Recent volatility has been driven by a series of global developments, including trade threats by US President Donald Trump against European allies over Greenland-related disputes, as well as warnings of steep tariffs on Canada if it finalises a major agreement with China. Although some of the tensions have eased, markets remain on edge.
Concerns over a potential US government shutdown, a military operation launched by the United States in January targeting Venezuelan President Nicolas Maduro, and a legal confrontation between the Trump administration and Federal Reserve Chair Jerome Powell have further fuelled investor demand for precious metals.
Other contributing factors include a weakening US dollar, elevated inflation levels, falling bond yields and expectations that the Federal Reserve may cut interest rates later this year.
Kyle Rodda, senior market analyst at Capital, said the rally reflects a broader crisis of confidence in US assets triggered by erratic policy decisions. Shaun Osborne, chief currency strategist at Scotiabank, said international investors increasingly view the US as a less predictable environment for business and investment.
Looking ahead, analysts remain bullish. Philip Newman, director at Metals Focus, said gold prices could climb to around $5,500 later this year. Goldman Sachs has raised its end-2026 forecast to $5,400 an ounce, while Bank of America projects prices could reach $6,000 by spring 2026. JP Morgan also expects gold to remain strong through 2026 and 2027, with the possibility of further gains over the longer term.
