On Monday, gold rose above $5,000 for the first time in history due to the recent escalations in conflict around the globe. By 18:52 ET (00:52 GMT), gold had risen 1.1 percent to a new record of $5,035.83/oz and was at $5,074.71/oz in the U.S. Gold futures market.
Gold was up over 8 percent last week, hitting new record highs on multiple occasions, and has risen almost 17 percent year-to-date. Many other precious metals were also rising today, including silver, which gained over 2 percent to $106.56/oz, to establish a new record high. Similarly, platinum was higher at $2,798.46/oz.
In addition to physical demand from central banks, current market conditions are supporting gold’s long-term uptrend, while investors look to 2026’s projected easing of U.S. interest rates.
Tensions between the US and its NATO allies regarding Greenland have increased this month and are having a large impact on the global economic markets. The comments made by President Trump regarding US interests in the Arctic are seriously troubling many Europeans and have strained US and EU relations, raising concerns about potential future economic and diplomatic consequences.
Over the weekend, President Trump also heightened trade tensions with Canada when he stated that if Canada follows through with a trade agreement with China, he will impose a 100 percent tariff on Canadian imports into the US. On his social media platform, Trump stated that China could use Canada as a “drop off” location for goods entering the US and that if this trade agreement goes through, they would “eat Canada alive”.
Read: Why Gold Prices Are Reaching New Record Highs — What Investors Need to Know
Expectations associated with US Monetary Policy have contributed to Gold’s outlook. This coming Wednesday, the Federal Reserve will conclude its meeting regarding monetary policy, and all market participants expect the Fed to leave interest rates unchanged.
To a large extent, the market has already priced in this pause in the reduction of interest rates; however, the Fed’s statement and Chair Jerome Powell’s remarks will be scrutinized by market participants for future clues about timing and pace of any cuts that may come down the line later this year. Lower interest rate policies typically support gold because there is less opportunity cost associated with holding non-yielding financial instruments.
“While Chair Powell made a strong defence of independence of the Central Bank, it does not appear likely that the Fed will be cutting rates again anytime soon based on the data,” said ING analysts in a report. “The market will be looking for who will be named as the New Federal Reserve Chairman by President Trump, what future economic reports will indicate, and whether or not the new Chairman will be able to persuade the remaining committee members for additional cuts.”
