Gold prices soared past $5,100! The largest monthly increase in 40 years, driven by global turmoil and a surge in safe-haven demand

On Monday, influenced by the escalating global geopolitical tensions and market volatility, the spot gold price historically broke through the significant psychological barrier of $5,000 per ounce for the first time, further reaching a historic high of $5,110. Driven by a strong global risk aversion sentiment, investors are flooding into this traditional safe-haven asset at an unprecedented scale, ignoring the high prices and showing strong buying momentum.

According to reports, gold prices rose by 2.2% during Monday's trading, peaking at $5,110.50. As of now, the gold price has accumulated an increase of about 18% this month, likely to set the largest single-month gain in over 40 years. This trend continues the strong performance from last week, when concerns over the situation in Greenland had pushed gold prices to record the strongest weekly performance since the financial crisis.

Market analysis points out that the policy uncertainty during President Trump's term, concerns over the independence of the central bank triggered by the criminal investigation of Federal Reserve Chairman Jerome Powell, and geopolitical risks in places like Venezuela, Iran, and Greenland, collectively constitute the core driving forces behind this surge in gold prices. Ole Hansen, head of commodity strategy at Saxo Bank, noted that this investment momentum driven by "fear of missing out" is dominating the market, and the multiple uncertainties created by Trump remain a major driving force.

This wave of risk aversion has not only pushed up gold prices but has also driven the entire precious metals sector to soar. The spot silver price surged over 6% to above $110 per ounce, and platinum also reached a historic high. Meanwhile, the U.S. dollar index fell to a four-month low, and the yen to dollar exchange rate rose to a two-month high, further enhancing the appeal of dollar-denominated commodities amid currency market fluctuations.

Investors "desensitized" to prices

As gold prices break through key resistance levels, market sentiment has entered an excited state. Société Générale analyst Michael Haigh stated:

“We have crossed one threshold after another, and the speed is much faster than I expected. People are no longer sensitive to gold prices because they expect this momentum to continue.”

This momentum is built on record performances in 2025. Statistics show that gold soared by 64% in 2025, marking the largest annual increase since 1979. As we enter 2026, this upward trend has not stopped but has accelerated due to global turmoil.

In addition to geopolitical hotspots, trade frictions are also exacerbating market anxiety. According to Xinhua News Agency, Trump threatened last Saturday that if Canada continues to push forward with its trade agreement with China, he would impose a 100% tariff on Canada. Such remarks further stimulated the market's demand for safe-haven assets

Record Capital Inflows and Central Bank Gold Purchases

The dual demand from institutions and central banks provides solid support for gold prices. Data shows that last year, inflows into gold ETFs (exchange-traded funds) reached a record $89 billion. Meanwhile, global central bank demand for gold remains at historically high levels, making gold the second-largest reserve asset for central banks after the U.S. dollar.

Samantha Dart, co-head of global commodities research at Goldman Sachs, pointed out that gold offers investors an “option to hedge against the risks of uncertainty in monetary and fiscal policies.” Over the past few years, many central banks have continued to reduce their reliance on the U.S. dollar and increase their gold holdings for diversification purposes. Although this pace slowed last year, the overall trend remains solid.

Historically, each milestone for gold has often been accompanied by global turmoil: during the 2008 financial crisis, gold prices broke through $1,000; during the pandemic, they reached $2,000; and in 2025, amid volatility during Trump's first year in office, gold prices are expected to break through the $3,000 and $4,000 thresholds.

Weak Dollar and Uncertainty in Monetary Policy

Fluctuations in the foreign exchange market have also acted as a catalyst for rising gold prices. On Monday, the dollar fell 0.5% against a basket of major currencies and dropped 1.1% against the yen to around 154 yen. Prashant Bhayani, Chief Investment Officer for Asia at BNP Paribas Wealth Management, stated that the weak dollar makes dollar-denominated metals cheaper for holders of other currencies, thereby boosting demand, “it is the movement of the yen that is helping gold and base metals rise.”

Additionally, concerns about rising Japanese bond yields and speculation about the future policy path of the Federal Reserve have intensified market unease. Currently, investors are unwinding dollar positions in anticipation of this week's Federal Reserve meeting and the potential announcement of a new Federal Reserve Chair.

Targeting $6,000

In the face of such a strong upward trend, even the most optimistic market expectations seem conservative. Tai Hui, Chief Market Strategist for Asia Pacific at JPMorgan, admitted:

“Whenever someone presents an aggressive gold forecast, it tends to reach that price within weeks. The policy environment continues to point to uncertainties in the ‘new world order.’”

Analysts generally believe that gold prices still have room to rise this year, potentially moving towards $6,000. Reuters technical analyst Wang Tao noted that spot gold has broken through the resistance level of $5,070 and is expected to rise to a range of $5,154 to $5,206, with the possibility of eventually climbing to $5,427.

Meanwhile, other precious metals are also following suit. Spot silver climbed to a new high of $110.11 on Monday, continuing its astonishing 147% increase from last year; spot platinum rose 4.1% to a historical peak of $2,897.35 However, Alexander Zumpfe, a precious metals trader at Heraeus Metals Germany, also reminded that while the possibility of further increases cannot be ruled out under pressure scenarios, such trends may be accompanied by severe periodic corrections.