In early 2026, the price of gold had climbed to record highs, surpassing $5,000 per ounce for the first time. This latest surge builds on an extraordinary rally: in 2025, gold prices soared about 65%, the largest annual increase since 1979, and over the first 26 days of 2026 alone, gold has risen roughly 15% — pushing spot prices near $5,058 troy ounce.
Gold is widely seen as both a safe-haven asset and a barometer of market anxiety, drawing investors when global and domestic uncertainty intensifies. The most recent jump in gold prices has been fueled by a series of market-destabilizing events and policy shifts associated with President Donald Trump. These include the now-revoked tariff threats against NATO allies over Greenland, the U.S. military operation to capture Venezuelan President Nicolás Maduro, and the opening of a criminal investigation into Federal Reserve Chair Jerome Powell — developments that have heightened concerns about geopolitical risk and the independence of U.S. economic institutions.
Additional factors driving demand for the precious metal include a weaker U.S. dollar, higher-than-expected inflation, and market expectations that the Federal Reserve will cut interest rates later this year. Investors, unsettled by ongoing policy uncertainty and economic volatility, have increasingly turned to gold as a hedge against instability, helping push prices to historic levels.
Yeah, I think you hit well on the reasons why people are investing in gold, and when we know that when demand goes up, so do prices, which I think would explain the increase. I wonder as we get deeper into the Trump presidency and economic circumstances become clearer, if less people will invest in gold since there's less uncertainty or if this trend will only continue. Something to keep an eye on.
ReplyDeleteThis article is a great example to show that investors are leaning into safety with all the uncertainty around policy, inflation, and global tensions. It is interesting how quickly confidence shifts when markets get shaky. I wonder how long gold will hold these levels for?
ReplyDeleteIt is very interesting how uncertainly is so clearly displayed in the price of gold. Hearing that the price of gold is at a record high makes me wonder if maybe selling it now would be profitable for some people. I would assume that this uncertainty would decrease eventually, so selling now and then buying later could result in gains. I wonder if anyone is actually do this or if there is a reason that it is a bad idea?
ReplyDeleteGold can be a good investment as a steady contributor to a portfolio, especially when markets are volatile, and the future of companies or sectors is uncertain. Its intrinsic demand means it will always have value, though as discussed in class, it can be more difficult for new investors to enter the gold market compared to established investors.
ReplyDelete