Gold Soars as Investors Seek Safety

By Staff, Agencies

Gold jumped to nearly $5,600 per ounce Thursday as investors sought refuge in the metal amid rising geopolitical tensions and economic uncertainty.

The rally marks a continuation of an extraordinary bull run that has seen the metal gain over 27% this year alone, following a staggering 64% increase in 2025.

Spot gold rose 2.6% to $5,585.81 per ounce by 0607 GMT, after hitting a record $5,591.61. The metal surpassed $5,000 for the first time Monday and has gained over 10% this week.

Edward Meir, analyst at Marex, said the rally reflects worries over US debt and shifts in the global trading system. He told Reuters that “uncertainty created by signs that the global trade system is splintering into regional blocs” has driven investors toward gold.

OCBC analysts said gold has evolved beyond a crisis or inflation hedge to a reliable store of value, offering portfolio diversification. The so-called “debasement trade” has boosted demand as investors seek protection against weakening currencies and deteriorating public finances.

Gold’s surge is fueled by strong central bank buying, especially from emerging markets, and a weaker dollar that makes bullion cheaper for other currency holders.

Meanwhile, the Federal Reserve held rates Wednesday, with Chair Powell noting December inflation stayed above 2%. Gold, which earns no interest, becomes more appealing in such low-rate environments.

Silver rose 0.6% to $118.99/oz after hitting a record $119.34, up 60% this year on safe-haven demand, supply shortages, and momentum trading. Analysts warn of ongoing market tightness. Platinum gained 1.6% to $2,739.48, while palladium fell 1.3%.

Analyst Tony Sycamore of IG warned that the rally’s “parabolic nature” may bring a pullback, but fundamentals should remain supportive in 2026, with corrections offering buying opportunities.

The rally triggered a buying frenzy in Asia, with shoppers in Shanghai and Hong Kong and institutions—like a crypto group allocating 10–15% of its portfolio—adding to demand.