Gold tops US$5,000 an ounce as investors rush to safe haven
Gold climbed past US$5,000 per ounce, driven by geopolitical moves, a weaker US dollar and expectations of looser Fed policy. Analysts say prices could go higher.
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By Torontoer Staff
Gold climbed past US$5,000 per troy ounce for the first time late Sunday, trading at about US$5,058 by 8:14 p.m. ET, as investors moved into safe-haven assets amid heightened geopolitical and domestic uncertainty tied to U.S. policy. The metal is up roughly 15 per cent in the first 26 days of 2026, following a 65 per cent surge in 2025, the largest annual gain since 1979.
The rally reflects a mix of immediate political shocks and broader market conditions that make gold more attractive to institutions and private investors alike.
What pushed gold past US$5,000
A string of developments over the past month unsettled markets and accelerated demand for precious metals. Key drivers include geopolitical moves and trade threats from the U.S. administration, a criminal probe into the Federal Reserve chair, a softer U.S. dollar, and rising inflation readings that have left investors betting on lower interest rates later this year.
- Geopolitical shocks: the U.S. capture of Venezuelan President Nicolás Maduro, threats against Iran, and renewed trade tensions with allies.
- Trade rhetoric: threats of tariffs on European goods and later a warning of 100 per cent tariffs on Canadian imports tied to trade with China.
- Domestic political pressure: a criminal investigation into Federal Reserve Chair Jerome Powell, which has raised concerns about central bank independence.
- Macro factors: a weaker U.S. dollar, higher-than-expected inflation, and expectations that the Federal Reserve may cut interest rates, reducing the opportunity cost of holding non-yielding assets.
How the market mechanics work
Gold does not pay interest or dividends, so its price tends to perform better when real interest rates fall and the dollar weakens. Investors also turn to bullion when political risk or policy unpredictability rises, treating it as a store of value. Central banks buying physical gold further supports prices by reducing available supply.
Silver has moved in step with gold, gaining about 4.5 per cent to roughly US$107.80 an ounce on Sunday. Like gold, silver posted a strong 2025, when it recorded its best annual performance since 1979.
What analysts are saying
"lingering global policy uncertainty"
Goldman Sachs research note
Investment banks and strategists remain largely bullish. Goldman Sachs raised its forecast to US$5,400 per troy ounce, citing persistent policy uncertainty among private investors. Bank of America’s chief investment officer Michael Hartnett has suggested prices could move beyond US$6,000, pointing to the ongoing flow of capital into precious metals.
Gold prices could peak above US$6,000.
Michael Hartnett, Bank of America
What this means for investors
A record price does not mean gold is a guaranteed hedge. The metal can be volatile, and gains can reverse if geopolitical tensions ease, the dollar strengthens, or central banks tighten policy. Still, rising gold often reflects elevated risk perceptions, and investors adjust portfolios to manage that risk.
- Common ways to gain exposure include physical bullion, exchange-traded funds, mining stocks and gold-backed savings products.
- Physical ownership involves storage and insurance costs, while ETFs offer liquidity and lower transaction friction.
- Precious metals do not provide income, so they are typically used for diversification or as an inflation hedge rather than income generation.
Short-term outlook
Analysts say continued political unpredictability and expectations of looser U.S. monetary policy are likely to keep gold supported in the near term. However, shifts in the dollar, inflation prints, or rapid policy responses could change the trajectory quickly, which keeps price risk elevated.
For Canadians, a rising gold price in U.S. dollars can be amplified or muted by movements in the Canadian dollar, so currency effects should be considered when assessing local impact or planning purchases.
Gold’s breach of US$5,000 marks a milestone that reflects both immediate political shocks and broader macro trends. For now, persistent uncertainty and supportive market conditions leave room for further moves, and investors who consider adding precious metals should weigh the trade-offs between protection and volatility.
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